Never miss a story from Michael Boutros

Subscribe to receive daily updates on publications
Please enter valid First Name
Please fill out this field.
Please enter valid Last Name
Please fill out this field.
Please enter valid email
Please fill out this field.
Please select a country

I’d like to receive information from DailyFX and IG about trading opportunities and their products and services via email.

Please fill out this field.

Your Forecast Is Headed to Your Inbox

But don't just read our analysis - put it to the rest. Your forecast comes with a free demo account from our provider, IG, so you can try out trading with zero risk.

Your demo is preloaded with £10,000 virtual funds, which you can use to trade over 10,000 live global markets.

We'll email you login details shortly.

Learn More about Your Demo

You are subscribed to Michael Boutros

You can manage your subscriptions by following the link in the footer of each email you will receive

An error occurred submitting your form.
Please try again later.

In this series we scale-back and look at the broader technical picture to gain a bit more perspective on where we are in trend. The Australian Dollar has already posted an impressive 8.6% range against the Japanese Yen just two days into the start of 2019 trade- keep in mind the entire 2017 range was just 14.8%. The recent collapse in price fueled a test (and brief stint below) a critical multi-year support range before rebounding sharply. It’s make-or-break into the close of the week. Here are the key targets & invalidation levels that matter on the AUD/JPY weekly chart to start the year.

New to Forex Trading? Get started with this Free Beginners Guide

AUD/JPY Weekly Price Chart

AUD/JPY Weekly Price Chart

Notes: For nearly five-years we’ve been highlighting a critical support zone in AUD/JPY at 72.15-74.22- a region defined by the 1.618% of the 2013 decline and the key 61.8% retracement of the 2008 advance. Price has respected this critical pivot-zone as support since the 2009 breakout and despite a break below 2016 / 2017 pitchfork support, the broader short-bias may be vulnerable while above this threshold heading into January trade.

A weekly close below would risk substantial losses in price with such a scenario targeting longer-term measured targets at 64.90. Initials resistance now stands with former pitchfork support (currently ~77.90s) backed by the October range lows at 78.56- a breach / close above this level is needed to suggest a more significant near-term low may be in place.

For a complete breakdown of Michael’s trading strategy, review his Foundations of Technical Analysis series on Building a Trading Strategy

Bottom line:The AUD/JPY collapse seen over the past few weeks has now tested & responded to a major multi-year support pivot and a close below is needed to keep the broader short-bias viable. This week already marks the largest weekly range since June 2016 (the yearly low was registered that week) and leaves the short-bias vulnerable into the start of the month while above 72.15. From a trading standpoint, a good spot to reduce short-exposure / lower protective stops. I’ll be on the lookout for possible price exhaustion on another attempt to break this key support zone. Expecting accelerated losses on a close below.

Even the most seasoned traders need a reminder every now and then- Avoid these Mistakes in your trading

AUD/JPY Trader Sentiment

AUD/JPY Trader Sentiment
  • A summary of IG Client Sentiment shows traders are net-long AUD/JPY - the ratio stands at +3.21 (76.2% of traders are long) – bearish reading
  • Traders have remained net-long since December 6th; price has moved 9.3% lower since then
  • Long positions are 21.2% lower than yesterday and 12.3% lower from last week
  • Short positions are 5.4% lower than yesterday and 11.5% higher from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests AUD/JPY prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week and the recent changes in sentiment warn that the current AUD/JPY price trend may soon reverse higher despite the fact traders remain net-long.

See how shifts in AUD/JPY retail positioning are impacting trend- Learn more about sentiment!

Previous Weekly Technical Charts

Learn how to Trade with Confidence in our Free Trading Guide

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

Follow Michael on Twitter @MBForex