USD/JPY
The US dollar has rallied again on Friday against the Japanese yen after printing a very strong candle during the day on Thursday. The ¥113 level has been important more than once, and I think at this point we should see pullbacks looking for support in that area. We are at an area that has a lot of resistance built in, but the real prize is going to be above at the ¥114.50 level. That’s an area that has been extraordinarily bearish. If we can break that level, the ¥115 level would be the next target and according to my longer-term analysis, we could go as high as ¥120. Overall, I think this continues to be a “buy on the dips” type of market. In this market, it looks as if the break out from Thursday should bring in a new bullish move.
AUD/USD
The Australian dollar rallied during the day as well, but in the somewhat subdued manner. After breaking down significantly on Thursday, we found a bit of support at the 0.72 handle. Looking at this chart, we are still very much in Scott’s in a downtrend, and therefore I think that the market is probably going to continue to find sellers on rallies. The 0.7150 level underneath is a target, but I think at this point the upside is also limited, with the 0.7350 level has offered a massive resistance recently. At this point, it’s still a negative market and therefore I look at these rallies as an opportunity to sell the Australian dollar, as it suffers the bad fortune of being so closely tied to the Chinese economy outlook, which is struggling a bit in the tariff or so far.
