AUD/JPY Trading Strategy – Bearish
- Waiting for a daily close below the 75.789 support level
- AUD/JPY has been moving in 77.551-78.691 trading range
- 2019 fundamentals may bring AUD/JPY down below 74.263
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AUD/JPY has trading between 77.551-78.691 since breaking above the December resistance in early January. The pair has tested the upper bound but failed to gain sufficient momentum to close above 79.055.
The pair had a substantial dip on January 2, sending AUD/JPY down over seven percent before recovering shortly after.
Looking ahead, there are a few factors in the immediate to short-term outlook that could push AUD/JPY through the 77.551-76.953 range down toward 76.278 or even 75.789. Comments from officials at the World Economic Forum in Davos, Switzerland may send the pair lower, especially given the overall tone of the event.
AUD/JPY – 4-Hour Chart
Major economic indicators this week such as Australian employment data could move the pair downward if it falls short of expectations. CPI reports are scheduled to be released on January 30 at 00:30 GMT that may also be market moving. It’s worth noting that economic news out of Australia since early December has been underperforming relative to economists’ expectations according to the Citi Economic Surprise Index.
Fundamental factors such as slower growth in China – Australia’s biggest trading partner – with perhaps greater-than-expected economic vulnerability will likely weigh down on the Aussie. Other potentially growth-reducing headwinds – such as the trade wars – may also impact the Australian Dollar.
Sellers may find an opening to short below the 76.00 figure, eyeing the next line of support at 74.263. Considering near-term resistance at 76.278, investors might see such a setup as offering compelling risk/reward parameters.
AUD/USD – 4-Hour Chart
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AUD/JPY TRADING RESOURCES
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--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter
