USD/JPY
The US dollar has been very volatile during the session again on Friday, forming a relatively neutral candle, perhaps even a hammer depending on how stringent you are with the definition. With this does tell me is that there are plenty of buyers that jump into the market near the 108.50 level, and the fact that the area has been supportive in the past tells me that we will more than likely continue to see plenty of interest in this pair. Also, the US stock markets closed reasonably well on Friday, recouping some of the losses. Because of that, I think that the USD/JPY pair is likely to go looking towards the 110 level again. If we can break above there, the market will more than likely continue to go even higher, perhaps reaching towards the 114 handle.
AUD/USD
The Australian dollar had a very volatile day during the Friday session, breaking above the 0.78 handle. Ultimately, if we can break above the top of the range for the session on both Thursday and Friday, then I think the market probably goes looking towards the 0.79 level, and eventually the 0.80 level. This is a pair that is typically driven by the price of gold and of course the behavior of the US dollar, so pay attention to both of those. If gold can rally, that should help the Aussie dollar, and at this point it looks as if the 61.8% Fibonacci retracement level has offered enough interest to push the market higher, and quite frankly it’s not a surprise to see that we pull back this quickly, after shooting to the upside in a somewhat parabolic manner. Overall, I believe that this market does go higher, but I would need to see a clearance of the last couple of days.
