technical analysis AUDJPY

Technical analysis of AUDJPY

The Aussie dollar remained within a range in May against the yen between around ¥84 and ¥85.50, above the main technical reference of the 100% monthly Fibonacci retracement area, as sentiment remained generally constant. This morning the Reserve Bank of Australia signalled that it plans to keep its cash rate on hold at the record low of 0.1% until at least early 2023. This technical analysis of AUDJPY looks at areas of possible importance on the daily chart ahead of Thursday’s balance of trade from Australia.

The latest daily high from early May around ¥85.75 might be a significant resistance for the rest of the week. Low support could occur around ¥82, but the 100% Fibo retracement is likely to be more important in the immediate future.

Technical indicators on AUDJPY D1

 

Moving averages continue to give a strong buy signal, with the price above all three of the 50, 100 and 200 SMAs. The upper range of the value area between the 50 and 100 SMAs seems to be an important dynamic support.

There is currently no indication of overbought from either Bollinger Bands (50, 0, 2) or the slow stochastic (15, 5, 5) although the latter at about 66 is very slightly closer to the zone of buying saturation than neutral. Buying volume has been somewhat higher than selling over the last few sessions.

Price action and Fibonacci

 

The channel between about ¥84 and ¥85.50 seems to be fairly strong based on reactions to tests of each side: 10 May’s shooting star and 23 May’s short-tailed Doji establish the limits of the channel. Considering the bigger picture, the slightly inclined upward channel from 24 March still seems to be active.

The 100% monthly Fibonacci retracement area, i.e. full retracement of all the Aussie dollar’s losses from December 2018 to March 2020, remains a key focus, with a significant breakout upward from here probably requiring important new information. Meanwhile the 61.8% and 50% areas of the weekly Fibo fan might function as a channel over the next few weeks.

Technical analysis of AUDJPY: summary

 

The next key release affecting AUDJPY is Australian balance of trade for April, due at 1.30 GMT on Thursday. The consensus is for a gain of about A$2.4 billion to A$7.9 billion from the previous A$5.57 billion. Traders are also likely to monitor GDP data from Australia tomorrow morning at the same time.

Overall the technical picture for Aussie dollar-yen remains fairly positive, with more gains looking likely based on the chart over the next few days. Conversely, traders focussing on the medium- to long-term might traditionally prefer to buy in slightly lower than the current middle of the range.

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