After a summer filled with FED QE and government stimulus, the USD has taken it on the chin vs the majors. However, early August is shaping up to be a bit different. Forex players are standing pat for the moment, apparently happy with the greenback at current levels. Of course, the calm never lasts ― we are likely in for an active Monday following the weekend break.

On the commodity front,  WTI  crude oil is off more than $0.75 for the session on the heels of an especially-bleak Baker Hughes Rig Count. The U.S. count came in at 176, down from 180 last week. So, American shale continues to contract in response to last spring’s oil market meltdown.

Another big commodity story is today’s 2% drop in gold. Prices remain above $2000.00, but it looks like we are going to see consolidation in this area. Be on the lookout for an extended period of horizontal action with $2000.00 being a catalyst for 2-way action.

Let’s take a closer look at the USD as we roll toward the weekend break.

USD/JPY Rallies Ahead Of Weekend

In a Live Market Update from yesterday, I issued a short-trade recommendation for the USD/JPY. The trade initially performed well, producing a 20+ pip positive move. However, bids are winning the day and price has reversed course. As of this writing, the trade is still alive with the stop-loss at 106.09 yet to be hit.

Here are the levels to watch for early next week:

• Resistance(1): 62% Retracement, 106.25
• Resistance(2): Bollinger MP, 106.42
• Support(1): Daily SMA, 105.77

Bottom Line: If the current bull run in the USD/JPY continues after the weekend, I’ll be looking to sell the 62% Retracement from 106.24. With an initial stop loss at 106.54, this trade produces 30 pips on a standard 1:1 risk vs reward ratio.