USD/JPY Technical Analysis

The US dollar is higher against the Japanese yen after initially gapping lower. The 148 yen level above continues to be an area I would be watching pretty closely, mainly due to the fact that it not only has been a bit of resistance as of late, but it also features the 200 day EMA, which of course in and of itself will attract a certain amount of attention. I don’t necessarily want to buy the US dollar up here, but I don’t like the idea of shorting either.

Japan has plenty of its own issues at the moment and therefore, you have to look at the Japanese yen a little bit differently than other currencies against the dollar. With the Japanese government bond market seeing no bid days recently, that means the Bank of Japan will eventually have to step in and start monetizing the debt again. And that’s absolutely toxic for a currency. Pullbacks continue to be potential buying opportunities, with special attention paid to the 145 yen level.

AUD/USD Technical Analysis

The Australian dollar gapped lower, rallied a bit, and then started to fall again. This is a market that I think is probably pretty close to having to make a bigger decision, but as things stand right now, it’s just in this kind of choppy and perhaps even sloppy channel that we have been trying to kind of sort out here for three months. At this point in time, it does favor the upside, I guess, a little bit over the longer term, but you have to be extraordinarily patient. I do think that a pullback is probably more likely than not, but that pullback should attract a certain amount of attention near the now infamous 0.6550 level and then again at the 50 day EMA underneath there.

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