US 10-Year Yield Technical Analysis
The US 10-year yield has risen a bit here early on Wednesday as we continue to dance around the 4.60% level. This, of course, is going to have a major influence on certain things in the markets, as the bond market is crucial in determining risk appetite. As rates rise, this could put some pressure on some markets, so we will have to keep an eye on this, and it certainly helps the US dollar over the longer term as money looks to move to where it is best treated.
Bitcoin Technical Analysis
Bitcoin is the first market I am watching, actually, as it is at the 50-day EMA, and it is stalling a little bit for the day. The action on Tuesday was pretty strong; the action on Wednesday seems like it hit a brick wall. The market breaking above the $66,000 level could send buyers into it, and I would certainly be interested at that point myself. But if we fall from here, I think at that point we are probably looking at more consolidation. Bitcoin continues to be a bit lackluster in this environment; with higher rates, that does make a certain amount of sense.
Copper Technical Analysis
Copper looks like it is trying to continue the uptrend during the early part of the session. I am interested in owning it, but there is a gap that extends to the $6.50 level that was partially filled, and I think is still causing some issues. That being said, on short-term pullbacks, I am interested in trying to buy copper, with the 50-day EMA offering a certain amount of support. I have no interest in shorting copper; the longer-term outlook for it is very strong, so I only take long positions at this point. I will do it on a pullback or if we pick up a little bit of momentum.
AUD/JPY Technical Analysis
The Australian dollar might be a good way to play the Japanese yen, as the interest rate differential favors the Aussie. Of course, we have seen a lot of stability in the Australian dollar in general. With the Japanese yen weakness being pretty much market-wide, it does make a certain amount of sense that it is struggling against the Australian dollar, which, although not necessarily crazily strong, is somewhat strong and stable.
This avoids the US dollar, which is, of course, a little bit noisy at the moment. So, as we go into the New York session, the 114 yen level is an area that I think could be attractive for the market. If we can clear that, the next large, round, psychologically significant figure is 115 yen. Short-term pullbacks at this point, I believe, offer buying opportunities.