USD/JPY

The USD/JPY pair went back and forth during the day on Wednesday, as we continue to see volatility in the markets. Breaking down below the bottom of the shooting star from the previous session of course was negative, but by the end of the day, we gained back almost all of the losses from the trading session. If we can break above the top of the shooting star from the Tuesday session, it’s likely that we will go hunting for the 112.50 level above. A break above there could send this market looking towards the 114 handle. That is a level that has been interesting, and I think will continue to attract a lot of attention. A break above the 114 handle also could send this market to the 115 handle. The markets continue to be bullish in general, especially considering that we broke above the top of the hammer from the previous week.

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AUD/USD

The Australian dollar had a very bullish bounce off the 0.7550 level, after initially falling significantly. The market looks very likely to continue to find buyers underneath. To break above the top of the daily candle should send this market looking for the 0.7625 level above, and eventually higher than that. Once we do breakdown to the upside, this market should go hunting for the 0.7750 level afterwards. Ultimately, this market continues to be very volatile, and if gold could find some type of footing, it could send the Australian dollar higher over the longer-term as well.

The Federal Reserve looks likely to raise interest rates later in the year, but quite frankly the market already knows this so I don’t think it’s going to cause too many issues going forward, as it isn’t much of a surprise. Volatility will remain obviously, but that’s probably easy to say about almost any Forex. 

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