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Featured Trade: AUD/JPY testing resistance as BOJ looms

Short-term technical outlook on AUD/JPY (15 Mar)


click to enlarge charts

Key elements

  • The recent minor rebound from its 08 Mar 2019 low of 77.70 has led the AUD/JPY cross pair to test a significant short-term resistance zone at 79.25/35 which is defined by the former “Expanding Wedge” range support from 15 Feb 2019 low, the minor descending trendline from 26 Feb 2019 high, the upper boundary of a minor bearish “Ascending Wedge” in motion since 08 Mar 2019 low and a Fibonacci retracement/expansion cluster (the 76.4% retracement of the recent slide from 26 Feb 2019 high to 08 Mar 2019 low & the recent rebound from 08 Mar 2019 low to 12 Mar 2019 minor high projected from 13 Mar 2019 minor low.
  • The 1-hour Stochastic oscillator has reached an extreme overbought level which increases the odds of a minor retracement in price action of the recent rebound seen from 08 Mar 2019 low.
  • The next significant near-term support rests at 78.35 which is defined by the minor congestion zone of 09/13 Mar 2019 and the 61.8% Fibonacci retracement of the entire rebound from 08 Mar 2019 low to 15 Mar 2019 current intraday high of 79.21 seen in the Asian session.

Key Levels (1 to 3 days)

Pivot (key support): 79.35

Supports: 78.80 (trigger) & 78.35

Next resistance: 79.85 (key medium-term pivot)

Conclusion

If the 79.35 key short-term pivotal resistance is not surpassed and a break below 78.80 (minor “Ascending Wedge” support) is likely to reinforce a decline to target the 78.35 support in the first step in the coming days.

However, a clearance above 79.35 invalidates the bearish scenario for a squeeze up to challenge the 79.85 key medium-term pivotal resistance (the minor swing high areas of 21/26 Feb 2019 & the pull-back resistance of the former long-term secular triangle range support from Oct 2008 low).

Charts are from eSignal



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