AUD/JPY upside momentum losing steam
Kelvin Wong December 17, 2019 10:25 PM
AUD/JPY is looking vulnerable for a medium-term bearish breakdown below 76.30 resistance.
Medium-term technical outlook on AUD/JPY
click to enlarge charts
Key Levels (1 to 3 weeks)
Intermediate resistance: 75.65
Pivot (key resistance): 76.30
Supports: 74.65, 73.95 & 73.50
Next resistances: 77.75 & 80.50 (LT pivot)
Directional Bias (1 to 3 weeks)
Bearish bias in any bounces below 76.30 key medium-term pivotal resistance for a potential push down to target 73.95 (the “bearish flag” support) and a break below it reinforces a further slide to target the next near-term support at 73.50 (minor congestion area of 28 Sep/16 Oct 2019 & 50% Fibonacci retracement of the recent 3-month plus rally from 26 Aug low to 13 Dec 2019 high).
However, a clearance with a daily close above 76.30 invalidates the bearish scenario for a further corrective up move towards the next intermediate resistance at 77.75.
- The 6-big figure up move from 26 Aug 2019 low of 69.97 low of the AUD/JPY cross pair has started to evolve within a medium-term ascending “bearish flag” configuration, a potential consolidation/dead-cat bounce motion within its major descending channel in place since Nov 2014 high.
- In addition, the daily RSI oscillator has just traced out a bearish divergence at its overbought region which indicates that the recent upside momentum has abated. These observations coupled with the graphical analysis suggest that AUD/JPY may resume its impulsive down move sequence soon.
- The 76.30 key medium-term resistance is defined by the upper boundary of the “bearish flag”, swing high areas that rejected previous up moves during May/July 2019 and a Fibonacci expansion cluster.
- The lower boundary of the “bearish flag” is acting as a support at 73.95.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.