AUD/JPY bounces off key support
Fawad Razaqzada April 20, 2017 1:24 PM
The AUD/JPY has bounced strongly off a key support level today, suggesting that the recent downward trend may have come to a halt, at least for the time being anyway. We have also seen a correspondingly sharp rally on Wall Street, suggesting that the appetite for risk is still there despite the recent weakness and uncertainty about French elections on Sunday. But for now, we will take this bounce with a pinch of salt as it could be a ploy to trap the bulls before the next leg down.
As far as the AUD/JPY is concerned, well there has been a classic bounce from an old key resistance level of 81.50, which has turned into strong support. The unit has bounced a cool 100 pips off this level, though it was coming off the highs at the time of this writing. In addition to the horizontal support level, there is a vertical trend line and the 200-day moving average coming in close proximity. Thus, the area around 81.50 represents an important technical juncture, which means today’s bounce in AUD/JPY could merely be a technical bounce rather something more significant. But with price now being above Wednesday’s high and the 200-day average, both at 82.15, this level may turn into support upon a potential retest. If so, the AUD/JPY could climb towards, and possibly beyond, the next resistance levels at 82.80 and then 83.80.
But if the 82.15 level fails to hold as support then there is a good possibility that the AUD/JPY may go on to break below that critical 81.50 support at the second time of asking. Should that happen then we will be on the lookout for a deeper correction, possibly towards the 61.8% Fibonacci level at 78.50 or all the way to the psychological level of 75.00 next.
Source: eSignal and FOREX.com
More From Fawad Razaqzada
- USD/JPY path of least resistance still to downside April 24, 2017 1:11 PM
- EUR/USD surges on French election, but will it mind the gap? April 24, 2017 8:23 AM
- See More
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. GAIN Capital Group, LLC is a registered Futures Commission Merchant and Retail Foreign Exchange Dealer with the Commodity Futures Trading Commission (CFTC)and is a member of the National Futures Association (NFA # 0339826) in the US, GAIN Capital UK Ltd is authorised and regulated by the Financial Conduct Authority (FCA) in the UK, GAIN Capital Australia Pty. Ltd is regulated by the Australian Securities and Investment Commission (ASIC) in Australia, and GAIN Capital Japan Co. Ltd is authorised and regulated by the Financial Services Agency (FSA) in Japan. Please read Characteristics and Risks of Standardized Options.