News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
More View more
Real Time News
  • The Nasdaq 100 index has likely formed an inverse “Head and Shoulders” pattern, which is typically viewed as a bullish trend reversal indicator. Prices may advance further to challenge their all-time highs. Get your market update from @margaretyjy here: https://t.co/tvkE2y6X03 https://t.co/nxxMZFB3Pu
  • Earnings season begins this week with the arrival of quarterly reports from the country’s largest banks. Can they shrug off losses from the recent Archegos blowup and rally higher or will risk aversion take root? Market update from @PeterHanksFX here: https://t.co/Q0LEH8fHzu https://t.co/ywVQ1KwZ26
  • Traders focus a lot of their energy on spotting the perfect time to enter a trade. While this is important, it is ultimately where traders choose to exit trades that will determine success. Learn about the three types of trading exit strategies here: https://t.co/muYkTNXH7s https://t.co/i70XLrni1w
  • Trading bias allows traders to make informative decisions when dealing in the market. This relates to both novice and experienced traders alike. Start learning how you may be able to make more informed decisions here: https://t.co/rz7fqhRoMG https://t.co/Zl7sfu0OT2
  • What suits your style of trading stocks or commodities? Find out what are the differences in these two markets here: https://t.co/BnA07cMV0s https://t.co/QqlZ2dQgVv
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/lvIUu5FHoq
  • The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It is also referred to as the monthly market mover. Find out why it has been given this nickname here: https://t.co/yOUVEEqhc5 https://t.co/bpKdIqGxsn
  • Looking for a new way to trade reversals? One of the most used reversal candle patterns is known as the Harami. Like most candlestick formation patterns, the Harami tells a story about sentiment in the market. Get better with trading reversals here: https://t.co/rfwUWJfbz9 https://t.co/jmcAIW4w5k
  • It’s important for traders to be familiar with FX spreads as they are the primary cost of trading currencies. Understand a pair's spread here: https://t.co/zEEUHZBx7g https://t.co/M9isuvnzqF
  • The British Pound is giving back some of its multi-month gains with some pairs testing notable support despite a positive fundamental backdrop. Get your market update from @nickcawley1 here: https://t.co/6Ct5R0H41F https://t.co/c4rXmMjMrv
Short AUD/USD, AUD/JPY: Q2 Top Trading Opportunities

Short AUD/USD, AUD/JPY: Q2 Top Trading Opportunities

David Song, Strategist

Short AUD/USD, AUD/JPY as FX Market Correction in Focus for 2Q 2021

Advertisement

AUD/USD Weekly Chart

AUDUSD, AUD/USD, AUDUSD Weekly, TradingView

Chart prepared by David Song, created with Trading View

AUD/USD extended the V-shape recovery from 2020 to briefly trade above the 0.8000 handle in February, but a head-and-shoulders formation appears to be taking shape into the first quarter’s end. With the Relative Strength Index (RSI) exhibiting a similar dynamic as the indicator establishes a downward trend during the first quarter of 2021, traders should be mindful.

It remains to be seen if the decline from the February high (0.8007) will turn out to be a correction in the broader trend or a key reversal in market behavior. The 50-Week SMA (0.7220) continues to track a positive slope, but a break/close below the ‘neckline’ around 0.7560 (50% expansion) to 0.7580 (61.8% expansion) on a weekly timeframe would bring the downside targets onto the radar. The broader outlook for AUD/USD may align with the measured move for the head-and-shoulders pattern as long as the RSI retains the bearish trend from earlier this year. If so, the exchange rate may continue to narrow the gap with the 50-Week SMA (0.7220) if it pushes below the former resistance zone around 0.7370 (38.2% expansion) to 0.7390 (38.2% expansion).

AUD/JPY Weekly Chart

AUDJPY, AUD/JPY, AUDJPY Weekly

Chart prepared by David Song, created withTrading View

AUD/JPY has also extended the V-shape recovery from 2020 amid the ongoing rise in global equity prices, with the RSI pushing above 70 for the first time since 2013 during the same period. The low interest environment may continue to prop up AUD/JPY as the 50-Week SMA (76.44) retains a positive slope, but recent developments in the RSI warn of a larger correction in the exchange rate as it falls back below 70 to indicate a textbook sell signal.

In turn, the RSI may continue to show the bullish momentum abating if it snaps the upward trend carried over from the previous year, with a close below the 82.40 (50% expansion) region. On a weekly timeframe, that brings a Fibonacci overlap around 79.40 (23.6% retracement) to 80.20 (38.2% expansion) onto the radar. However, the decline from the March high (85.45) may turn out to be a correction in the broader trend rather than a shift in AUD/JPY behavior as major central banks rely on their emergency tools to achieve their policy targets. Should that prove the case, there is potential for former resistance areas to act as support on the improvement in investor confidence.

Top Trading Opportunities in 2021
Top Trading Opportunities in 2021
Recommended by David Song
Get Your Free Top Trading Opportunities Forecast
Get My Guide

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES