Short-term technical outlook on AUD/JPY (01 Apr)
click to enlarge charts
- In our previous “Featured Trade” idea dated on 15 Mar, the AUD/JPY cross pair has indeed staged the expected push down and hit the near-term supports of 78.35 and even the 77.50 medium-term range support of 77.50 after a test on the 79.35 key short-term pivotal resistance (click here for a recap).
- Right now, the pair has staged a bounce of 130 pips since 28 Mar 2019 minor swing low to test the minor descending trendline in place since 26 Feb 2019 high now acting as a resistance at 79.20 reinforced by the upbeat China manufacturing PMI data (official & Caixin) for Mar that has indicated growth as both readings have inched back up above the 50 level after a contraction phase since Dec 2018.
- Interestingly, the pair is also hovering right below the 79.35 key short-term pivotal resistance with weak short-term momentum readings The 1-hour RSI oscillator has flashed a bearish divergence signal at its overbought region coupled with the daily RSI oscillator right below a corresponding significant resistance at the 60 level.
Key Levels (1 to 3 days)
Intermediate resistance: 79.20
Pivot (key resistance): 79.35
Supports: 78.70 & 78.00
Next resistance: 79.85 (key medium-term pivot)
If the 79.35 key short-term pivotal resistance is not surpassed, the AUD/JPY may see another round of push down within its medium-term range configuration in place since Jan 2019 to target the next near-term supports at 78.70 and 78.00.
On the other hand, a break above 79.35 negates the bearish tone for an extension of the on-going rebound to test the 79.85 key medium-term pivotal resistance (the medium-term range top & pull-back resistance of the former long-term secular triangle range support from Oct 2008 low).
StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.