AUD/JPY Price Chart - Daily Timeframe

AUD/JPY Price Analysis: Yearly Low Exposed After Early-March Reversal -

AUD/JPY opened the week just above a key support pivot with a rebound in price taking the pair back towards downtrend resistance. The focus is on a break of a near-term range as we look for evidence that a larger recovery may be underway within the context of the broader downtrend.

AUD/JPY Daily Price Chart

AUD/JPY Price Chart - Daily Timeframe

Technical Outlook: In this week's Technical Perspective we noted that AUD/JPY was testing a critical inflection zone at 81.58 , " into the weekly open and IF price is going to rebound, this would be a good spot. " Indeed the pair rebounded after testing this key support threshold with the advance turning just ahead of confluence resistance at 83.38 . The immediate focus is on a break of range with a breach above the median-line needed to fuel the next leg higher. That said, a break below would keep the broader short-bias in play targeting the sliding parallel (red) and the 61.8% retracement at 80.57 .

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AUD/JPY 120min Price Chart

AUD/JPY Price Chart - 120min Timeframe

Notes: A closer look at AUD/JPY price action highlights a near-term descending pitchfork formation extending off the January highs with the pair rebounding off a sliding parallel (red) extending off the 2/14 low early in the week. The advance encountered resistance at 83.28/38 yesterday- note that this threshold converges on the median-line and a breach / close above would be needed to suggest a more significant near-term low is in place. Such a scenario eyes subsequent topside resistance objectives at 84.25/38 backed by the upper parallel.

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Interim support rests with the 61.8% retracement of the advance at 82.19 with a break below 81.5 8 needed to put the bears back in control targeting 80.57/68 . Bottom line: We're looking for evidence that a near-term low is in place and on the back of what looks like a clear five-wave advance off the lows, we'll favor fading weakness while above 81.58.

From a trading standpoint, I'll be looking for a pullback here to offer favorable entries targeting a break higher. Ultimately, we'd be looking to sell a larger rally up towards the upper bounds of this formation. Keep in mind we still have the release of the Bank of Japan (BoJ) interest rate decision on Friday.

For a complete breakdown of Michael's trading strategy, review his Foundations of Technical Analysis series on B uilding a T rading S trategy .

AUD/JPY IG Client Sentiment

  • A summary of IG Client Sentiment shows traders are net-long AUDJPY- the ratio stands at +1.57 (61.1% of traders are long) - bearish reading
  • T raders have remained net-long since Feb 8 th ; price has moved 4.3% lower since then
  • Long positions are 1.1% lower than yesterday and 14.6% lower from last week
  • Short positions are 5.2% lower than yesterday and unchanged from last week
  • We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests AUDJPY prices may continue to fall. Retail is more net-long than yesterday b ut less net-long from last week and t he combination of current positioning and recent changes gives us a further mixed AUDJPY trading bias from a sentiment standpoint.

See how shifts in AUD/JPY retail positioning are impacting trend- Le arn more about sentiment!


Relevant Data Releases

AUD/JPY Economic Calendar

Other Setups in Play

- Written by Michael Boutros, Currency Strategist with DailyFX

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

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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