AUD/JPY Rally Approaching Initial Resistance Hurdle
- AUDJPY approaches resistance confluence at 90.02/19
- Updated targets & invalidation levels
- Event Risk on Tap This Week
Chart Created Using FXCM Marketscope 2.0
Broader Technical Outlook
AUDJPY has been trading within the confines of a well-defined ascending channel formation off the late-October low with the rally now approaching its first major resistance hurdle at 90.03/19. This key region is defined by the 38.2% retracement of the decline off the 2014 high & the 76.4% retracement of the August decline and converges on both near-term & medium-term channel resistance. The pair is at risk for a pullback off these levels but the trade remains constructive above 88.64 / channel support.
Note that the momentum profile remains promising with a multi-month support trigger continuing to guide the oscillator. A breach higher targets resistance objectives at 90.71 (200DMA) and the upper median-line parallel / 91.53.
Notes:Intraday RSI is coiling up as we head into highlighted resistance with the immediate long-bias at risk below this threshold. Note we are at resistance within an uptrend and we’ll be looking for a pullback to offer favorable long entries. Soft support rests at 89.33 & 89 backed by our near-term bullish invalidation level at 88.60 / channel support.
A quarter of the daily average true range yields profit targets of 18-20pips per scalp. Added caution is warranted heading into Australian GDP data tonight as well as Trade Balance & Retail Sales later in the week with the releases likely to fuel volatility in the Aussie crosses.
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Relevant Data Releases Next Week
Other Setups in Play:
- AUD/NZD Pullback Testing Pivotal Support
- GBP/JPY Plummets Into Support- Sell Rips Sub 186
- Webinar: Dollar Crosses at Key Juncture Ahead of US Holiday
- EUR/CAD Rebound Eyes 1.4340 Hurdle
- NZD/USD Drops Into September High- Bearish Sub 6588
---Written by Michael Boutros, Currency Strategist with DailyFX
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