AUDJPY Could Break Major Resistance

AUDJPY Could Break Major Resistance

AUDJPY Could Break Major Resistance

Between the Reserve Bank of Australia, Bank of Japan and Federal Reserve monetary policy announcements, AUD/JPY is in play next week. For the past month, gains in AUDJPY have been capped by the 200-day SMA, which is hovering right above 80 and it won’t take much to drive AUDJPY above this key resistance level. The RBA could express optimism about its economy, the Bank of Japan could surprise with easing, the Federal Reserve could harden its case for tightening or non-farm payrolls could surprise to the upside. There’s a good chance that one or more of these possibilities will come true in the week ahea,d which is why we believe AUD/JPY could break major resistance. Australian data has been good and the RBA has been generally optimistic. The BoJ is prone to surprises and NFP needs to rise strongly to validate the Federal Reserve’s hawkish bias.

Technically, if AUDJPY rises above 80.35, which takes it above its 3 month high, the 200-day SMA and the 50% Fibonacci retracement of 2008 to 2013 rally it should be clear sailing to its June and July high near 81.50. If this resistance holds in the coming week, then a move down to 79, which was resistance in the first half of October and where the 20-day SMA stands becomes likely.

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