AUD/JPY Fails at Resistance Ahead of RBA Minutes- Support 84.72

Talking Points

• AUD/JPYReverses off confluence resistance
• Immediate focus lower- broader bullish invalidation 84.72
• Updated targets & invalidation levels

AUDJPY Daily

Chart Created Using FXCM Marketscope 2.0

Technical Outlook: AUDJPY is responding to confluence resistance at 86.31- this level is defined by the 61.8% retracement of the December – January range, the late January/February high and the median-line extending off the January 15th outside reversal-day low. Note that the daily momentum signature is also testing resistance at 60 and could cap the advance near-term. Likely to get some more pullback here but the trade remains constructive near-term while above 84.72- a break below this level would suggest a larger correction may be underway targeting the lower median-line parallel, currently around ~82.15. This setup was highlighted in my Top Trading Opportunity of 2016.

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AUDJPY 30min

Notes: A basic trendline support extending off the late-February low converges on the 2015 low-day close at 84.72 and we will reserve this level as our near-term bullish invalidaiton level. Interim resistance stands at the 2015 low-week reversal close at 85.47 with a breach above 86.31 targeting subsequent topside objectives at the 200-day moving average at 87.31 backed by the 2016 open at 87.54.

A quarter of the daily average true range (ATR) yields profit targets of 35-39 pips per scalp. Added caution is warranted heading into the release of the RBA minutes tonight with the Australian employment report & the FOMC policy decision likely to fuel Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term in risk-sensitive pairs. Continue tracking this setup and more throughout the week- Subscribe to SB Trade Desk and take advantage of the DailyFX New Subscriber Discount!

Check out SSI to see how retail crowds are positioned as well as open interest heading into February trade.

Relevant Data Releases

Other Setups in Play:

• Webinar: USDOLLAR FOMC Preview- Key Levels to Know
• AUD/CHF Deeper Sell-Off to Offer Favorable Entries
• GBP/USD Coils Below Key Resistance- Bullish Invalidation 1.3920
• USDOLLAR: Key Levels to Know Heading into NFPs, March Open
• USD/CHF Rebound Stalls at2016 Open- Bearish Invalidation 1.0072

---Written by Michael Boutros, Currency Strategist with DailyFX

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original source

By: Michael Boutros, Currency Strategist