Australian Dollar Outlook, AUD/JPY Technical Analysis –TALKING POINTS
- AUD/JPY launching offensive to take on formidable resistance
- Will another failed attempt induce aggressive selling pressure?
- Longer-term positioning still strongly supports a bearish bias
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The Australian Dollar may fail to gather enough momentum against the Japanese Yen to break above multi-month downward-sloping trend resistance. Sideways movement for the week of October 13 likely had to do with traders waiting to commit capital until after critical Australian jobs report was published.
AUD/JPY Before Jobs Data – Daily Chart
AUD/JPY chart created using TradingView
Earlier this month the pair bounced back from the 71.720-71.949 support zone but traded relatively flat as they entered resistance. The short-bodied nature of the candles combined with the long wicks extending from either ends suggests traders were withholding directional commitment. However, following the jobs data the pair moved higher. This supports the theory that AUD/JPY was perhaps waiting for a fundamental catalyst.
AUD/JPY After Jobs Data – Daily Chart
AUD/JPY chart created using TradingView
However, what is the scope of upside movement? It is possible that the pair may break beyond this point with a daily close, though traders may wait to add exposure until there is follow-through or the pair retreat back under resistance. A brief bounce back may materialize in the short term, but the wider perspective supports a downside bias.
AUD/JPY – Weekly Chart
AUD/JPY chart created using TradingView
AUSTRALIAN DOLLAR TRADING RESOURCES
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--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter
