AUD/JPY Technical Outlook: Rally Rejected during Resistance

The Australian Dollar has traded within a scarcely 4% operation opposite a Japanese Yen given a start of May trade with a AUD/JPY pullback from a pivotal insurgency operation final week risking serve losses. Here are a levels that matter as we conduct into vital eventuality risk after this week.

AUD/JPY Daily Price Chart

AUD/JPY Price Chart - Daily Timeframe

Technical Outlook:In this week’s Technical Perspective on AUD/JPY, we highlighted a well-defined cost operation on a weekly charts while observant that, “from a trading standpoint, I’ll preference vanishing strength near-term though honour this operation with a weekly tighten indispensable to countenance a mangle on possibly side.” The daily draft shows cost trade within a shoal descending channel arrangement with daily RSI imprinting clever bearish dissimilarity into a monthly high. The concentration stays on this spin from a range-highs with a near-term risk reduce while subsequent 84.25.

Initial daily support rests with a monthly open during 82.34 corroborated closely by a 61.8% retracement of a Mar advance at 82.04. Ultimately a mangle / tighten subsequent a reduce parallels would be indispensable to symbol resumption of a broader down-trend. A topside crack of a monthly opening-range highs shifts a concentration towards successive insurgency objectives during a 85-handle corroborated by a 200-day relocating normal / 50% retracement during 85.35/40.

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AUD/JPY 120min Price Chart

AUD/JPY Price Chart - 120min

Notes: A closer demeanour during AUD/JPY cost movement sees a span branch from Fibonacci insurgency currently during 84.12 with an outside-reversal bar off a highs changeable a near-term concentration lower. Initial support targets are eyed during a weekly open during 82.95 corroborated by 82.52. Key support rests during 82.04/21 where a 100% prolongation and a 61.8% retracement converged on parallel support. A crack above today’s highs puts us neutral, with a convene leading 84.48 indispensable to fuel a subsequent leg aloft targeting 84.79 and a 100% prolongation during 85.01.

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Bottom line: The annulment off operation insurgency has us looking reduce for now. With major executive bank seductiveness rate decisions from a FOMC, ECB, and BoJ expected to expostulate marketplace sentiment, demeanour for this ‘risk-sensitive’ span to respond in a days ahead. From a trade standpoint, I’ll preference vanishing strength while within this near-term slope formation.

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AUD/JPY IG Client Positioning

AUD/JPY Trader Sentiment

  • A outline of IG Client Sentiment shows traders are net-long AUD/JPY- a ratio stands during +1.16 (53.8% of traders are long) – diseased bearishreading
  • Long positions are 6.8% aloft than yesterday and 2.8% reduce from final week
  • Short positions are 0.6% aloft than yesterday and 15.8% aloft from final week
  • We typically take a contrarian perspective to throng sentiment, and a fact traders are net-long suggests AUD/JPY prices might continue to fall. Yet, traders are some-more net-long than yesterday though reduction net-long from final week and the multiple of stream positioning and new changes gives us a serve churned AUD/JPY trade bias from a perspective standpoint.

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Relevant AUD/JPY Data Releases

AUD/JPY Economic Calendar

Economic Calendarlatest economic developments and upcoming event risk

Other Setups in Play

– Written by Michael Boutros, Currency Strategist with DailyFX

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