AUD/JPY Technical Outlook: Rally Rejected At Resistance

The Australian Dollar has traded within a nearly 4% range against the Japanese Yen since the start of May trade with the AUD/JPY pullback from a key resistance range last week risking further losses. Here are the levels that matter as we head into major event risk later this week.


AUD/JPY Price Chart - Daily Timeframe

Technical Outlook: In this week’s Technical Perspective on AUD/JPY, we highlighted a well-defined price range on the weekly charts while noting that, “from a trading standpoint, I’ll favor fading strength near-term but respect this range with a weekly close needed to validate a break on either side.” The daily chart shows price trading within a shallow ascending channel formation with daily RSI marking strong bearish divergence into the monthly high. The focus remains on this turn from the range-highs with the near-term risk lower while below 84.25.

Initial daily support rests with the monthly open at 82.34 backed closely by the 61.8% retracement of the March advance at 82.04. Ultimately a break/close below the lower parallels would be needed to mark resumption of the broader downtrend. A topside breach of the monthly opening-range highs shifts the focus towards subsequent resistance objectives at the 85-handle backed by the 200-day moving average / 50% retracement at 85.35/40.


AUD/JPY Price Chart - 120min

Notes: A closer look at AUD/JPY price action sees the pair turning from Fibonacci resistance today at 84.12 with an outside-reversal bar off the highs shifting the near-term focus lower. Initial support targets are eyed at the weekly open at 82.95 backed by 82.52. Key support rests at 82.04/21 where the 100% extension and the 61.8% retracement converged on parallel support. A breach above today’s highs puts us neutral, with a rally surpassing 84.48 needed to fuel the next leg higher targeting 84.79 and the 100% extension at 85.01.

1 2
View single page >> |

Disclosure: Do you want to see how retail traders are currently trading the US Dollar? Check out our IG Client Sentiment ...

How did you like this article? Let us know so we can better customize your reading experience. Users' ratings are only visible to themselves.


Leave a comment to automatically be entered into our contest to win a free Echo Show.