AUD/JPY Mounting for Third Attempt at Breaching 79.853 Resistance?
AUD/JPY TECHNICAL ANALYSIS: BEARISH
- AUD/JPY stubbornly trading between 77.735-79.852
- The pair have attempted to breach upper bound twice
- If attempt to break is futile, could signal bearish bias
See our free guide to learn how to use economic news in your trading strategy!
Since late-December, AUD/JPY has been persistently trading between the upper and lower bound of the 77.735-79.852 range. The pair attempted to break past resistance twice in February and appears to be endeavoring for a third. If AUD/JPY fail again, it may suggest traders are feeling are feeling overwhelmingly bearish and do not believe prevailing economic conditions can support a consistent rise above 79.852.
AUD/JPY – Daily Chart
The breakdown in hope for upward movement in the pair may drag AUD/JPY down to the lower bound with eyes at the next possible support at 75.243. Along the way, there may be inter-support levels which would act as soft-floors and possibly slow the descent.
Zooming out, a weekly chart shows how the Australian Dollar continuously fell against the Japanese Yen before forming a congestive track in January. The rapid selloff was likely the result of fundamental-driven fears over slower Chinese growth and the trade wars. But as the outlook began to look more mixed – though now more tilted toward the downside – traders may have halted their selloffs as a response to the ambiguity.
A break above or below the 77.735-79.852 range would possibly indicate traders are feeling more bullish or bearish on the pair’s trajectory, respectively. Watching how it interacts with these psychological floors and ceilings is therefore crucial to gaining insight on what traders believe the overarching direction is for the pair.
FX TRADING RESOURCES
- Join a free Q&A webinar and have your trading questions answered
- Just getting started? See our beginners’ guide for FX traders
- Having trouble with your strategy? Here’s the #1 mistake that traders make
--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitrion Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.