Talking Points

  • AUD/JPY testing key support confluence- Shorts at risk near-term above 83
  • Updated targets & invalidation levels
  • Looking for more trade ideas? Review DailyFX’s 2017 Trading Guides. Join Michael for Live Weekly Trading Webinars on Mondays at 13:30GMT (8:30ET)

AUDJPY Daily

AUD/JPY Daily Chart

Technical Outlook:AUDJPY trading just above a near-term support confluence at 82.97-83 where he 38.2% retracement of the advance off the July advance converges on the lower median-line parallel. Today’s low registered at 83.22 and while we could still see a drop into this key support zone, the short-bias is at risk while above the figure. Interim resistance stands with the median-line (currently ~84.40s).

Keep in mind a weekly close below 83.76 would constitute a break of the early opening range & would keep the medium-term outlook weighted to the downside in AUDJPY. As noted in this year’s Top 2017 Trading Opportunities, we were looking for a pullback early in the year but ultimately I’d be interested in long-entries into structural support. We’re now at the first hurdle- 81.36 is would be considered critical support.

AUDJPY 240min

AUD/JPY 240min Chart

Notes:A closer look at price action highlights a perfect tag of support at the lower parallel today with immediate resistance seen at 83.76 backed by 84.42 & 85.03/19 – both areas of interest for exhaustion / short-entries. A break below 82.98 targets subsequent support objectives at the September 2015 low at 82.12 & the 50% retracement at 81.36. From a trading standpoint, I’d be willing to take a few stabs on the long-side for a rebound if we go for another test of the figure with a breach above the upper parallel / 85.84 (bearish invalidation) needed to shift the broader focus back to the topside.

A quarter of the daily average true range (ATR) yields profit targets of 20-25pips per scalp. Other than Japan PMI numbers tonight, the docket is rather light for this pair and we’ll keep an eye on broader market sentiment for further guidance.

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Relevant Data Releases

AUD/JPY: Sell-off Approaches Initial Support Hurdles

Other Setups in Play:

- Written by Michael Boutros, Currency Strategist with DailyFX

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