Pairs in Focus This Week – USD/JPY, EUR/USD, Gold, Oil

The USD/JPY continues to strengthen against the Japanese yen as we have seen a lot of bullish pressure during the course of the week. At this point, it looks like the market is going to go racing toward a ¥150 level, but it may take some time to get there. Short-term pullbacks continue to offer buying opportunities, and we are little overdone so don’t be surprised at all to see an initial pullback, followed by traders willing to get involved in the market.

The EUR/USD has plunged during the course of the week, but did see Thursday and Friday off for a little bit of a push back at the 1.05 level. All things being equal, this is a market that I think gives an opportunity to short every time it rallies, and if we break down below the 1.05 level, I think it’s very likely that this market drops all the way down to the parity level. The 1.0250 level is an area that a lot of people will be paying attention to as well. On a rally, pay special attention to the 50-Week EMA.

Gold markets have been destroyed during the week, and it now looks like they are racing toward the $1800 level. I have no interest whatsoever in trying to buy gold, because I do think that it is probably only a matter of time before we see this market break toward the $1800 level. On any short-term rally, I am selling the first signs of exhaustion as gold is continuing to get beaten up by interest rates, and the size of this candlestick shows that something just broke.

The West Texas Intermediate Crude Oil market has initially shot higher during the week they gave back gains rather quickly. This shows that we are getting a little overextended, and therefore I think it does make a certain amount of sense that we would see this market pull back a bit. That pullback should end up being a nice buying opportunity due to the fact that there is a serious supply/demand issue out there. If we break above the top of the candlestick, then it’s very likely that we could go looking to the $100 level.

The GBP/USD initially felt during the trading week but is trying to bounce a bit. We are oversold at this point so I would not be surprised at all to see the British pound rally a bit, but I would keep an eye on the 1.2350 level as a major resistance barrier. Alternatively, if we were to break down below the bottom of the candlestick, then it opens up a move down to the 1.1850 level underneath, which is a large, round, psychologically significant area and an area that we have seen a lot of support at previously. Keep in mind that the Federal Reserve remains very tight, and that is weighing upon the hair here.

The NASDAQ 100 has been all over the place during the week, which makes sense considering that it was the last week of the month. Quite frankly, there’s a lot of “end of the month markup” coming into the picture, and I think you got a situation where we are more likely than not going to see a little bit of a bounce. We don’t technically have a bullish flag formed, but you can make an argument for it at the moment. While I’m not necessarily excited about the US economy, there is a certain amount of “groupthink” that comes into this market, as traders continue to buy all of the top stocks yet again.

The Nikkei 225 has been negative for the week but remains very sideways overall. I think at this juncture, it’s likely that we continue to turn back around, it is probably worth noting that the US session close with a sudden surge higher and typically the Asians like to step into the market and turn things back around. With that being the case, I think we got a situation where we try to rally toward the ¥33,000 level over the next week or 2. If we break down below the ¥31,400 level, then we could go down to the 50-Week EMA.

The US dollar has rallied significantly during the course of the trading week against the Swiss franc, and we have broken out against a short-term resistance barrier. At this point, I think we’re probably due for a little bit of a pullback, but I think it’s also only a matter time before the buyers come back in and push the US dollar toward 0.94 CHF level over the next several weeks. I have no interest in shorting this market, at least not as long as the Federal Reserve remains this type.