The US dollar exploded to the upside during trading on Wednesday, slicing through the ¥114 level in a surprise move later in the day. The market has hardly pulled back at all, and therefore it looks as if you blinked, you didn’t have much of an opportunity to get involved again. The ¥114.50 level above is the beginning of significant resistance to the ¥115 level, and with the jobs number coming out tomorrow, I think we may get a short-term pullback. The ¥114 level should be support though, so I don’t know that we break down much further than that. However, I think that the jobs number will eventually send this market higher, especially if it’s anything close to what we had seen during the ADP number on Wednesday. Ultimately, I think that the market does break out in kits well above the ¥115 level, bringing in more of a “buy-and-hold” scenario. Pullback should be looked at as potential buying opportunities.
The Australian dollar has broken down rather significantly during the trading session on Wednesday, slicing through the 0.7150 level on its way to the 0.70 level possibly. I think that it’s only a matter time before we reach that level, as we have been in a fairly significant downtrend for some time and of course the Australian dollar is highly leveraged to the Chinese economy. Because of this, I think it’s only a matter time before the sellers come back into this market on rallies that show signs of exhaustion. If we can break down below the 0.70 level, that would be extraordinarily negative for the Aussie. With all of the US dollar strength that we have seen out there, it makes sense that we continue to see the Aussie fall.
This article provided by NewsEdge.