100 pip bounce on the USD/JPY

The Dollar has been weakening since the beginning of today’s trading session versus the main world currencies, especially versus the Yen, due to the risk aversion that the markets have felt for today. The main stock exchanges around the world are in the red and that has hurt the Dollar, that is why we saw the USD/JPY plummet to the 118.00 level, only to bounce right back up above the 119.00 level. The pair moved 100 pips in one direction and 100 pips in the opposite direction.

The volatility that we have seen on the pair has been really amazing and now if the 4 hour candle closes like a “hammer” formation, then there is a good chance the trend will change to the upside and a visit to the 120.00 level is possible.

The USD/JPY may try to break new highs

Fundamentally speaking everything points out to more weakness on the Yen versus the Dollar. Even though today we had a down day for the USD/JPY, this could be an opportunity for new traders to come in or to add to current positions expecting the pair to continue higher. Therefore, let us pay attention to another possible visit of the 121.85 level, which is its latest high. For the moment, the 120.00 level stays as a good support zone.

Possible bullish pullback on the AUD/USD

The US Dollar remains very strong after today’s jobs data out of the United States showed that the US economy is in good track and the outlook seem rosy. The Non-Farm Payrolls number came out a lot better than expected, salaries went up, and the unemployment rate remained at 5.8%. This has put pressure on pairs like the AUD/USD, which has broken below the 0.8400 level. However, we should pay attention to a possible pullback to the 0.8400 level, which could act as resistance and hold the price there. That could present us with an opportunity to go short.

The USD/JPY is at levels not seen since 2007

The Dollar continues strengthening versus the Yen and today it has broken the 120.00 level to the upside for a moment. It then pulled back below the 120 level and it is currently stabilizing round that area. The USD/JPY had not visited the current levels since July, 2007. The different monetary policies that the United States Federal Reserve and the Bank of Japan are taking, might put more pressure on the Yen and we could see the pair break new highs. However, on the 4 hour chart we see a Doji formation with long shadows, this implies that the pair has been very volatile, but undecided. A possible long entry could be at the 119.00 level if we see a visit to that zone where a probable bounce to the upside could happen.

Very important trade management event

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The AUD/USD is at a good support area

The AUD/USD remains very weak, but it has currently reached the 200 period exponential moving average zone on the monthly chart, around the 0.8400 area. This visit to the 200 EMA on the monthly chart is very important and the pair my try to bounce to the upside or at least try to stall here. However, if the fundamentals from Australia keep showing weakness on the Australian economy and Friday’s Non-Farm Payrolls report out of the US comes out better than expected, then we could see a breakdown of this support.

Oil drops to 63.70 Dollars per barrel

The price of Light Sweet Oil for January delivery has reached a low for today of 63.70 Dollars per barrel as shown on the 4 hour chart, but it has recovered some loses at the moment. We may see a pullback to the 70.00 level, but the commodity remains very weak due to over-production. Even though some members of OPEC have asked Saudi Arabia to cut its production, the Saudis are not willing to take the pain all alone and want other members to cut their production too. That is why Saudi Arabia is not cutting its production yet and the price of crude keeps dropping.