Skip to Content
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. See our updated Privacy Policy here.

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
More View More
Australian Dollar Technical Analysis: AUD/JPY, AUD/USD Rates Outlook

Australian Dollar Technical Analysis: AUD/JPY, AUD/USD Rates Outlook

Christopher Vecchio, CFA, Senior Strategist
Advertisement

Australian Dollar Outlook:

  • AUD/JPY rates have fallen back into a former bull flag, which suggests a deeper setback towards the ascending trendline from the March 2020 and December 2021 lows is possible.
  • AUD/USD rates set fresh yearly lows today, suggesting that the bottom has not yet been reached.
  • According to the IG Client Sentiment Index, AUD/JPY rates have a mixed bias while AUD/USD rates have a bullish bias.
AUD Forecast
AUD Forecast
Recommended by Christopher Vecchio, CFA
Get Your Free AUD Forecast
Get My Guide

Commodities Weigh on Aussie

A bout of weakness in base metals, energy, and precious metals is hurting the commodity-linked Australian Dollar. Alongside a backdrop of generally deteriorated risk appetite over the past few weeks and a Reserve Bank of Australia that has disappointed rate hike expectations, the Australian Dollar remains mired in a downtrend. Technical weakness in the two major AUD-crosses, AUD/JPY and AUD/USD rates, hints that bears remain firmly in control.

AUD/USD RATE TECHNICAL ANALYSIS: DAILY CHART (October 2021 to October 2022) (CHART 1)

AUD/USD rates established a fresh yearly low during today’s session, hinting that the sharp downtrend in place since mid-September remains the primary driver of price action. Momentum remains overtly bearish with the pair below its daily 5-, 8-, 13-, and 21-EMA envelope, which is in bearish sequential order. Daily MACD continues to trend lower below its signal line, while daily Slow Stochastics are holding in oversold territory. AUD/USD rates may be aiming for a cluster of Fibonacci retracements just above 0.6100 in the near-term.

The Fundamentals of Range Trading
The Fundamentals of Range Trading
Recommended by Christopher Vecchio, CFA
The Fundamentals of Range Trading
Get My Guide

IG Client Sentiment Index: AUD/USD RATE Forecast (October 11, 2022) (Chart 2)

AUD/USD: Retail trader data shows 75.72% of traders are net-long with the ratio of traders long to short at 3.12 to 1. The number of traders net-long is 3.03% lower than yesterday and 4.55% higher from last week, while the number of traders net-short is 1.36% higher than yesterday and 10.34% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests AUD/USD prices may continue to fall.

Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current AUD/USD price trend may soon reverse higher despite the fact traders remain net-long.

AUD/JPY RATE TECHNICAL ANALYSIS: DAILY CHART (October 2021 to October 2022) (CHART 3)

AUD/JPY rates have made an important development in recent days, falling back into the bull flag that was carved out between June and August while also dropping below the 61.8% Fibonacci extension of the March 2020 low/May 2021 high/August 2021 range at 92.92 and the 76.4% Fibonacci retracement of the 2013 high/2020 low range at 94.68. With momentum indicators firmly bullish – the pair is below its daily 5-, 8-, 13-, and 21-EMA envelope, which is in bullish sequential order, daily MACD is trending lower below its signal line, and daily Slow Stochastics have in oversold territory – further losses towards the ascending trendline from the March 2020 and December 2021 lows above 88.00 can’t be ruled out over the coming weeks.

The Fundamentals of Breakout Trading
The Fundamentals of Breakout Trading
Recommended by Christopher Vecchio, CFA
The Fundamentals of Breakout Trading
Get My Guide

IG Client Sentiment Index: AUD/JPY Rate Forecast (October 11, 2022) (Chart 4)

AUD/JPY: Retail trader data shows 40.38% of traders are net-long with the ratio of traders short to long at 1.48 to 1. The number of traders net-long is 2.65% lower than yesterday and 6.96% lower from last week, while the number of traders net-short is 5.65% lower than yesterday and unchanged from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests AUD/JPY prices may continue to rise.

Positioning is less net-short than yesterday but more net-short from last week. The combination of current sentiment and recent changes gives us a further mixed AUD/JPY trading bias.

Trade Smarter - Sign up for the DailyFX Newsletter

Receive timely and compelling market commentary from the DailyFX team

Subscribe to Newsletter

--- Written by Christopher Vecchio, CFA, Senior Strategist

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

DISCLOSURES