Market News & Analysis
AUD/JPY upside momentum losing steam
Kelvin Wong December 18, 2019 2:25 PM
Medium-term technical outlook on AUD/JPY
click to enlarge charts
Key Levels (1 to 3 weeks)
Intermediate resistance: 75.65
Pivot (key resistance): 76.30
Supports: 74.65, 73.95 & 73.50
Next resistances: 77.75 & 80.50 (LT pivot)
Directional Bias (1 to 3 weeks)
Bearish bias in any bounces below 76.30 key medium-term pivotal resistance for a potential push down to target 73.95 (the “bearish flag” support) and a break below it reinforces a further slide to target the next near-term support at 73.50 (minor congestion area of 28 Sep/16 Oct 2019 & 50% Fibonacci retracement of the recent 3-month plus rally from 26 Aug low to 13 Dec 2019 high).
However, a clearance with a daily close above 76.30 invalidates the bearish scenario for a further corrective up move towards the next intermediate resistance at 77.75.
- The 6-big figure up move from 26 Aug 2019 low of 69.97 low of the AUD/JPY cross pair has started to evolve within a medium-term ascending “bearish flag” configuration, a potential consolidation/dead-cat bounce motion within its major descending channel in place since Nov 2014 high.
- In addition, the daily RSI oscillator has just traced out a bearish divergence at its overbought region which indicates that the recent upside momentum has abated. These observations coupled with the graphical analysis suggest that AUD/JPY may resume its impulsive down move sequence soon.
- The 76.30 key medium-term resistance is defined by the upper boundary of the “bearish flag”, swing high areas that rejected previous up moves during May/July 2019 and a Fibonacci expansion cluster.
- The lower boundary of the “bearish flag” is acting as a support at 73.95.
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