USD/JPY Technical Analysis
The US dollar initially shot higher against the Japanese yen and then has collapsed. There has been a lot of selling above 146 yen. The question is, can we turn things around? I still think we’re in the midst of trying to reach the bottom. But right now, it’s just so messy that it’s really difficult to get aggressive to the upside. Nonetheless, I do think that there is an opportunity on pullbacks to buy the US dollar due to interest rate differential, which is going to remain sky high, especially as the Japanese are having trouble finding buyers for their bonds again.
AUD/USD Technical Analysis
The Australian dollar is slightly positive, but it’s still just messy sideways trading, really, when you look at this. The 200 day EMA is relatively flat and offers a little bit of support, but the 0.64 level is even more important. Underneath there you have the 0.635 zero level, which should offer support. Clearing both of those to the downside probably opens a trap door trade against the Aussie where we just fall off of a cliff. On the other hand, if we can turn around a break above the 0.65 level, that allows the Australian dollar to go much higher. We did peak above there on Monday, but Monday, of course, was Memorial Day, meaning that there was a serious lack of liquidity.
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