AUD/USD & AUD/JPY Price Outlook:
- AUD/USD is probing overhead resistance as it attempts to extend a higher-high
- Similarly, AUD/JPY has moved beyond an area that has frequently offered resistance
- Should risk appetite continue, AUD/USD and AUD/JPY may look to extend higher
Australian Dollar Forecast: AUD/USD, AUD/JPY Ponder Topside Breaks
The Australian Dollar has extended its upward trajectory against the US Dollar and Japanese Yen this week and both Aussie pairs may continue higher if technical hurdles can be mounted and risk trends remain accommodative. In the case of AUD/USD, recent strength has allowed the pair to post a new higher-high relative to last week while taking aim at potential resistance derived from a swing high in early 2019 around 0.7287.
AUD/USD Price Chart: Daily Time Frame (November 2018 – August 2020)
The move beyond last week’s peak is an encouraging step, but further progress beyond 0.7287 might open the door to further buying as the technical barrier is surpassed and bulls can set their sights on secondary resistance. If initial resistance is surpassed, a possible second line of defense may reside at the November 2018 swing high around 0.7391.
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AUD/JPY Forecast
AUD/JPY has also staged an attack higher. Compared to AUD/USD, the move in the Aussie-Yen cross looks to be much more established. Consequently, bulls could look to extend the run higher after resistance that had held the pair in check for months was broken. We highlighted this pair for a possible break out two weeks ago, but an initial attempt was followed by a retreat beneath the two technical formations and it looked as though the summer doldrums were going to arrest attempted moves in either direction.
AUD/JPY Price Chart: 4 – Hour Time Frame (June 2020 – August 2020)
That said, the volatility brought about by the Jackson Hole symposium may have been the final factor required to spark the current price action. With resistance overtaken and support beneath, AUD/JPY looks ripe for a continuation higher at this time. Still, a false break lower has occurred already, so a reversal lower is not entirely out of the question. Thus, proper risk management is key. In the meantime, follow @PeterHanksFX on Twitter for updates and analysis.
--Written by Peter Hanks, Strategist for DailyFX.com
Contact and follow Peter on Twitter @PeterHanksFX
