- AUD/JPY testing key support confluence- Shorts at risk near-term above 83
- Updated targets & invalidation levels
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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.
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.
Relevant Data Releases
Other Setups in Play:
- GBP/USD: Fret Not, a Resolution is at Hand- Critical Support 1.23
- AUD/USD: RBA Game Plan & Levels to Know
- Webinar: Setups We’re Tracking into the Monthly / Quarterly Open
- EUR/USD: Down But Not Yet Out
- Written by Michael Boutros, Currency Strategist with DailyFX