The US dollar has rallied significantly during trading on Friday, reaching towards the psychologically and structurally important ¥110 level. The level is an important psychological resistance barrier as well as structurally resistant, so it would not surprise me to see a bit of resistance appear. At the first signs of exhaustion I’m more than willing to sell, and I think that the failure at the ¥110 level is a signal to start selling again. If we do break above the tub of the resistance area, which I see as summer closer to ¥110.50, then we could go as high as ¥112. However, I think that the market will continue to be difficult to deal with and navigate, but we have recently broken down and sliced through a ton of support. After doing that, it shows that there is a lot of technical damage to this market. I believe that we will eventually test the ¥108 level.
The Australian dollar initially tried to rally during the trading session on Friday, reaching towards the 0.7250 level. That’s an area that has been resistive more than once, and I think we are going to see this market pull back. We had gotten a bit too ahead of ourselves recently, and I think that this is a healthy pull back that as needed. However, I think there is plenty of support underneath though, especially near the 0.70 level underneath. I think that level is the beginning of major support extending down to the 0.68 handle, so I think it’s only a matter of time before the buyers jump back in based upon longer-term charts. The Australian dollar will of course continue to be driven by the US/China trade relations, which seemed as if they are warming a bit, but there are no concrete decisions yet.
This article provided by NewsEdge.