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As risk trends continue to dictate price action in the forex market, the technical outlook favors a bearish forecast for the AUDJPY.
Currency Pair: AUD/JPY
Chart: 60 Min Charts
Short-Term Bias: Bearish
Analysis Update
The AUDJPY slipped to an intraday low of 60.52 during the overnight session, but bounced back to hold near 61.00-61.10 (61.8% Fib retracement level). Fading demands for carry trades favors a bearish outlook for the pair over the near-term, and the aussie-yen may face increased selling pressures over the remainder of the week as investors continue to curb their appetite for risk. Over the remainder of the week, I expect the pair to work its way down towards last week’s low of 57.77, and we may see the AUDJPY cross below the 120 SMA over the next few hours of trading. However, the fundamental event risks scheduled for the next 24 hours may call for a change in our outlook.
Analysis
As risk trends continue to dictate price action in the forex market, the technical outlook favors a bearish forecast for the AUDJPY. After falling to a low of 55.08 of 10/27, the pair jumped to a high of 70.53 on 11/4, but the lack of momentum to push higher has held the pair in a downward trend. At the beginning of the week, we saw the pair move towards 62.85 (50.0% Fib retracement level), but the failure to break above this level suggests that the pair will move lower over the remainder of the week. Moreover, the divergence from the 120 SMA should drag the pair lower over the next few hours of trading, and may work its way towards the moving average by the end of the session. Be sure to check out other Technical Reports from DailyFX for additional information on the major currency pairs.
To contact the author of this article, please email: dsong@fxcm.com
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