USD/JPY
The US dollar gapped higher against the Japanese yen at the open on Monday as the news hit the wires on Sunday that the FBI was not going to press charges against Hillary Clinton. Because of this, there was a renewed faith in the US dollar, and we continue to go higher. It looks as if we are trying to reach towards the 105 level, which is a massive resistance barrier that has been tested before. If we can break above there, I feel that the market will continue to go higher. At that point, the market could very well reach towards the 107 level above which has been resistance in the past. Ultimately, pullbacks should continue to offer support, as the 102.50 level is essentially the “floor” in this market.
AUD/USD
The Australian dollar initially fell during the day on Monday, but then turned around to reach towards the 0.7750 handle. This is an area that is massively resistive, so with that being the case it’s very likely that his can take quite a bit of momentum to finally break out. We have been making “higher lows” as we go long, and that of course is a very bullish sign. Ultimately, I do think of this market will break out but it probably needs a little bit of a boost from the gold markets as well. I have no interest in shorting this market, as there is more than enough support below to continue to push this market higher and higher. A break above the 0.7750 level should send this market looking for the 0.80 level.
Ultimately, I have no real interest in trading this market until we get the breakout, because quite frankly pullbacks should continue to offer buying opportunities as the market has been so bullish over the longer term.
