Japanese Yen Bulls Fail To Crack USDJPY Range Base Once Again
Japanese Yen Technical Analysis - Talking Points:
- USDJPY base survives
- However, another attempt looks very likely
- AUDJPY’s upside try lacks conviction so far
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Dollar bulls have for the moment fended off the downside range break which looked all-too likely after the sharp USDJPY falls seen on July 10 and 12. But sure enough this week’s Monday bounce came at that day’s intraday low, which coincided exactly with the range base, at 107.76.
That clearly now remains as important near-term support, with little between the market and 2019’s low should it break on a daily or weekly closing basis.
Dollar bulls still have plenty of work to do if this break is to be avoided. If they can’t get back above immediate resistance at 108.48 (last Thursday’s closing high), then another test of the current base looks inevitable.
If they can then the immediate order of business will be to top 108.88, thereby erasing those sharp mid-July falls. From there they can make an attempt at the range top, but another test of the base looks more likely at this point.
The Australian Dollar has been trapped in a similar range trade against the Japanese unit virtually all month. Perhaps lent some likely unreliable fundamental support by the markets’ current prognosis that Australian rates won’t fall again anytime soon, AUDJPY is attempting an upside break.
The move appears to lack a bit of conviction so far, however, with daily ranges of the narrow sort which tend to speak to general market indecision. A break would put immediate focus on that clear previous notable high (June 30’s 0.7626). That said, the short-term will to accomplish that is not obvious and a relapse back into the range looks like the most likely prospect.
Market watchers should be aware that key Australian labor-market data are due on Thursday. We know from recent pronouncements that this series looms extremely large in Reserve Bank of Australia’s monetary policy thinking, so some movement on the data can be expected.
It will probably have to come in widely at variance with expectations of 9,000 new jobs to make a lasting impact on trade, however.
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--- Written by David Cottle, DailyFX Research
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