AUD/JPY tests swing peak, putting a 6-month down move into question.

AUD/JPY buyers are currently encountering a crucial resistance level at 74.48, after surpassing the Ichimoku cloud. Backing the short-term positive picture is the 50-day simple moving average (SMA) which has adopted an upwards-sloping demeanor and the Tenkan-Sen which has fulfilled a bullish crossover of the Kijun-Sen line.

Also supporting the improving positive outlook are the signals from the short-term oscillators. The stochastics have ascended into the overbought zone but the %K has yet to cross below the red %D line, suggesting that potential advances are still in place. Moreover, the MACD has distanced itself into the bullish territory and above its red trigger line, while the RSI is approaching the 70 level.

If the bulls manage to clearly violate the 74.48 swing peak of September 13, the 75.32 resistance level, which is the 50.0% Fibonacci retracement of the down leg from 80.70 to 69.94, could provide some downside pressure. Another push higher could test the 200-day SMA presently at 76.00 before traders’ focus turns to the 61.8% Fibo of 76.60.

In the negative scenario, if the 74.48 level restricts further gains, support could initially come somewhere between the 38.2% Fibo of 74.05, and the 100-day SMA currently around 73.73. Lower, the bottom of the Ichimoku cloud around 73.00, where the 50-day SMA and 23.6% Fibo reside, could interrupt the drop to the 71.00 area.

Summarising, the short-term bias is looking positive, with a decisive move above 74.48 awaited to shift the view from neutral to positive. In the medium-term picture, traders would resume positive sentiment above 76.60.


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This information is not considered as investment advice or investment recommendation but instead a marketing communication. This material has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Source: XM

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