Featured Trade: Bullish exhaustion seen in AUDJPY ahead of RBA

Short-term technical outlook on AUD/JPY (Mon 01 Jul)



click to enlarge charts

The Australian central bank, RBA will hold its monetary policy meeting tom, 02 Ju at 0430 GMT. Market participants and the ASX interbank futures market are expecting another cut on its policy cash rate to 1.00%, a fresh record low. Please click here to read our RBA’s preview.

The AUD/JPY cross pair is now displaying an interestingly technical set-up as follow;

  • The recent rebound of 235 pips from its 18 Jun 2019 low of 73.93 has reached a key short-term resistance of 76.35 as defined by the swing high areas of 20 May/10 Jun 2019 and a Fibonacci retracement/expansion cluster.
  • Bullish exhaustion signs have started to emerge at the 76.35 resistance where it has formed an impending bearish daily “Gravestone Doji” candlestick pattern coupled with a bearish divergence seen in the shorter-term 1-hour RSI oscillator at its extreme overbought level.
  • The next significant near-term supports rest at 75.40 and 74.80 (also the minor ascending trendline from 18 Jun 2019 low & 61.8% Fibonacci retracement of the recent rebound from 18 Jun low to 01 Jul 2019 current intraday high).

Key Levels (1 to 3 days)

Intermediate resistance: 75.90

Pivot (key resistance): 76.35

Supports: 75.40 & 74.80

Next resistance: 77.20/50

Conclusion

If the 76.35 key short-term pivotal resistance is not surpassed, the AUD/JPY may see a further potential slide to target the next near-term supports at 75.40 and 74.80 next.

On the flipside, an hourly close above 76.35 invalidates the bearish scenario for an extension of the corrective rebound towards the next resistance at 77.20/50 (former range resistance from 25 Jan/22 Mar 2019 & 50% Fibonacci retracement of the retracement of the recent decline from 17 Apr high to 18 Jun 2019 low).

Charts are from eSignal


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.

The markets are moving. Stop missing out.

OPEN AN ACCOUNT