USD/JPY
The USD/JPY pair fell during the day on Friday, as we continue to see bearishness in this market. I believe that this market will continue to see bearish pressure, as we are starting to see more of a “risk off” type of marketplace in general. I think that the 118.50 level above is massively resistive, and it’s not until we break above there that I will consider buying this market. Because of this, I am actually looking at rallies as potential selling opportunities on signs of exhaustion, as the market is decidedly bearish.
This pair tends to be very highly influenced by the S&P 500 as well, so keep an eye on that particular market. Right now, it looks as if we are going to continue to see bearish pressure in that market, and with the general malaise when it comes to risk assets around the world, I believe that we will more than likely see the 115 level tested below.
NZD/USD
The NZD/USD pair fell initially during the course of the day on Friday but found enough support at the 0.64 level to bounce and form a little bit of a hammer. That hammer of course is a bullish sign but at this point in time I do not look at it as a signal to start buying with any significance. True, I think you could go long on a break above the top the hammer, but you would have to be very nimble to get out of the market before we break back down. I think that the area just below is massively supportive down to the 0.6250 level, so it makes sense to see a bit of a bounce. However, if you do not have the ability to watch the markets, this is not a trade you should be taking.
If we do get that rally, I would love to see an exhaustive candle at higher levels in order to start selling again. I think we are simply trying to build up enough momentum to finally break down, as the New Zealand dollar is highly influenced by commodity markets in general. Most of them look horrible, so I do not want to own the Kiwi for any real length of time.
