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AUD/JPY Rally Approaching Initial Resistance Hurdle

AUD/JPY Rally Approaching Initial Resistance Hurdle

Michael Boutros,

Talking Points


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.

For updates on this scalp and more setups throughout the week subscribe to SB Trade Desk

Relevant Data Releases Next Week

Other Setups in Play:

---Written by Michael Boutros, Currency Strategist with DailyFX

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.