Weekly Technical Perspective on AUD/JPY

2018-06-11 16:18:00

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AUD/JPY Weekly Price Chart
AUD/JPY IG Client Positioning
AUD/JPY Economic Calendar

A look at the weekly technicals for AUD/JPY heading into major event risk
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In this series we scale-back and take a look at the broader technical picture to gain a bit more perspective on where we are in trend. Here are the key levels that matter on the weekly chart for the Australian Dollar vs the Japanese Yen (AUD/JPY). Review this week’s Strategy Webinar for an in-depth breakdown of this setup and more.

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AUD/JPY Weekly Price Chart

Notes: AUD/JPY has continued to trade within a well-defined range for nearly ten weeks now with major event risk this week likely to be a catalyst for the break and to offer clarity on our medium-term price outlook. Key support rests at 81.58/97 where the 2015 & 2017 lows converge on basic trendline support extending off the 2016 lows. Range resistance stands at the 2017 open / 100% extension at 84.25/71.

A downside break of this range targets the 1.618% extension of the 2017 decline at 79.45. A topside breach of this range (alongside a break above the pending RSI resistance trigger) eyes subsequent confluence resistance objectives at ~85.50s where the 52-week moving average converges on former slope support, turned resistance.

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Bottom line: We’re looking for a price breakout for guidance. From a trading standpoint, I’ll favor fading strength near-term but respect this range with a weekly close needed to validate a break on either side. Keep in mind this is considered a ‘risk sensitive’ pair – expect volatility this week with the interest rate decisions from the FOMC & BoJ (Bank of Japan), Australian employment data and the Nuclear Summit between President Trump and North Korean Leader Kim Jung Un, likely to drive market sentiment in the days ahead.

AUD/JPY IG Client Positioning

A summary of IG Client Sentiment shows traders are flat AUD/JPY- the ratio stands at +1 (50.0% of traders are long) – neutral reading
Long positions are 5.0% lower than yesterday and 16.2% lower from last week
Short positions are 7.3% higher than yesterday and 74.5% higher from last week
We typically take a contrarian view to crowd sentiment, and the fact traders are net-neutral offers little indication. Yet traders are less net-long than yesterday and compared with last week and therecent changes in sentiment warn that the current AUD/JPY price trend may soon reverse higher despite the fact traders remain net-long.

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