technical analysis AUDJPY

Technical analysis of AUDJPY

The Aussie dollar has retraced from earlier gains this week as risk appetite remains somewhat unstable and Australia’s GDP data yesterday were somewhat worse than expected. Conversely, the return to growth in China, Australia’s most important trade partner, remains strong based on recent data. Today’s technical analysis of AUDJPY looks at the four-hour chart.

The main resistance on this chart is the latest high around ¥78.40. Support can be found at the bottom of the chart in the area of ¥75.70; however, this latter area probably won’t be tested in the immediate future, with moving averages being more important over the next few days unless there’s a sudden change in the tone of fundamentals.

Technical indicators on AUDJPY H4

 

Moving averages continue to print a strong buy signal, with each of the 50, 100 and 200 SMAs successively above slower ones and below the price. The space between the 50 and 100 SMAs has widened significantly this week. Probably the most important areas from moving averages as supports into next week will be the 100 around ¥76.80 and the 200 around ¥76.30.

There’s currently no overbought signal from either Bollinger Bands (50, 0, 2) or the slow stochastic (15, 5, 5) although the latter at 25 is actually quite close to the zone of selling saturation. In the context of a clear uptrend for AUDJPY since late March, an upward crossover of the stochastic might be an important buy signal, especially if it occurs in oversold. Volume has remained slightly lower than the average for August so far this week, but this doesn’t necessarily mean much given the relative lack of activity in many markets on Monday and Tuesday.

Price action and Fibonacci

 

Price action at the start of last week around the 200 SMA seems to confirm this area’s importance as a support. We can also point to two separate interrupted three soldiers later last week as possibly presaging more gains: that upward wave didn’t end in a clear zone of established resistance.

The 50% zone of the daily Fibonacci fan seems to be the most important area in the immediate future on this chart. Price is currently testing this area; failure to move below it might signal consolidation upward over the next few periods. Equally, a move clearly below the 50% Fibo might suggest a deeper retracement into next week and possibly a retreat to the slower MAs below.

Technical analysis of AUDJPY: summary

 

Overall the technical picture for Aussie dollar-yen is quite positive and more gains could be expected next week unless there’s a significant change in sentiment. Bad news related to Chinese industry and imports could also lead to AUD taking a hit. Traders then are likely to watch data on Chinese imports on Monday morning GMT and, to a somewhat lesser extent, Australian monthly retail sales early tomorrow morning.

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