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AUD/JPY Targets Support Ahead of Australian Employment Report

AUD/JPY Targets Support Ahead of Australian Employment Report

  • AUD/JPY in consolidation ahead of Australian Employment Report
  • Updated targets & invalidation levels
  • Check out FXCM’s Forex Trading Contest!

AUDJPY 30min

Chart Created Using FXCM Marketscope 2.0

Technical Outlook: AUDJPY has been trading within the confines of a descending median-line formation extending off the March & April highs with the pair in consolidation after stretching into a low of 78.17 earlier this month. The upper median-line parallel converges on the topside of this consolidation range at 80.54/68 – a region also defined by the April low, the monthly open and last week’s high. We’ll reserve this threshold as our bearish invalidation level with a breach above the 81.04 needed to validate a larger scale reversal targeting 81.95 & more significant resistance into 82.43/57.

A break below the monthly low-day close at 78.82 keeps the short-bias in focus targeting at 78.17 & the yearly low at 77.57. Heading into tonight’s Australian employment data, I would be looking for near-term weakness to offer a test of support – look for a reaction there. Typically these patterns are continuation patterns but I wouldn’t be surprised to see a near-term reversal given the respective Aussie & Yen positioning vs the dollar. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount.

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  • A summary of the DailyFX Speculative Sentiment Index (SSI) shows traders remain net long AUDJPY- the ratio stands at just 2.75 (76% of traders are long)- bearishreading
  • Yesterday the ratio was 2.73; long positions are 1.4% higher than yesterday and 6.1% above levels seen last week
  • Open interest is 1.2% higher than yesterday and 8.6% above its monthly average.
  • SSI has typically not held at these extremes for too long and over the past year you can see pullbacks off these levels are typically accompanied by a reprieve for the broader downtrend- Bottom line: risk remains for a bounce before we break lower.

Why and how do we use the SSI in trading? View our video and download the free indicator here

Relevant Data Releases This Week

Other Setups in Play:

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

Follow Michaelon Twitter @MBForex contact him at mboutros@dailyfx.com or Click Here to be added to his email distribution list

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

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