AUD/JPY Rallies to Fresh Yearly Highs – Initial 2017 Targets in View

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Talking Points

AUD/JPY Weekly

AUD/JPY Weekly Chart

Technical Outlook: AUD/JPY sealed above technical insurgency during 87.55/64 final week, gripping a broader long-bias intact. Price is pulling by a yearly opening-range highs on this widen with a convene now eyeing a initial yearly aim during 90.64-91.23. This operation is tangible by a 1.618% prolongation of a 2016 allege and a 50% retracement of a decrease off a 2014 highs. Note that RSI is contrast a 70-threshold and a weekly tighten will be critical here.

AUD/JPY Daily

AUD/JPY Daily Chart

Today’s high (so far) purebred only pips forward of a Jul 2015 pitch lows during 89.16 before pulling back. Note that near-term slope insurgency converges on this segment and serve highlights a significance of today’s close. Interim daily support now rests during 87.55/64 with broader bullish cancellation during 86.93. A topside crack targets successive insurgency targets during 90.03 90.64/72.

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AUD/JPY 240min

AUD/JPY 240min Chart

Notes: A closer demeanour during a 240min draft highlights an embedded descending channel arrangement we’ve been tracking off a Jun lows with cost unwell to reason above a top bounds. The evident topside disposition is during risk while next this threshold though a broader opinion stays constructive while within this formation. Interim support during 88.18 corroborated by 87.55/64.

From a trade standpoint, I’ll be looking for signs of near-term depletion here with a pullback to offer some-more auspicious long-entries. Added counsel is fitting streamer deeper in a week with Aussie practice total and a BoJ expected to fuel increasing sensitivity in their particular crosses

AUD/JPY Sentiment

  • A outline of IG Client Sentimentshows traders are net-short AUD/JPY- a ratio stands during -2.19 (31.3% of traders are long) – bullish reading
  • Retail has been net-short given Jun 29th– cost has changed 4.1% aloft given then
  • Long positions are 2.6% aloft than yesterday though 31.4% lower from final week
  • Short positions are 1.5% higher than yesterday and 26.4% aloft from final week
  • We typically take a contrarian perspective to throng sentiment, and a fact traders are net-short suggests AUD/JPY prices might continue to rise. That said, Positioning is reduction net-short than yesterday but some-more net-short from final week and the multiple of stream view and new changes gives us a serve churned near-term trading bias.
  • Bottom line: Sentiment is entrance off extremes and highlights a near-term risk to this advance. Ultimately, we would be looking to blur a broader pullback in a pair.

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Relevant Data Releases

AUD/JPY Economic Docket

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Other Setups in Play:

– Written by Michael Boutros, Currency Strategist with DailyFX

Follow Michael on Twitter @MBForex or hit him during mboutros@dailyfx.com.

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