Technical Analysis AUDJPY : 2020-01-20


Strong buy
Strong sellSellNeutralBuyStrong buy

Above 76.9

Buy Stop

Below 73.7

Stop Loss

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MA(200) Buy
Parabolic SAR Buy
Bollinger Bands Buy

Chart Analysis

IFC Markets Tech Analysis

The AUDJPY is in a rising channel above the 200-day moving average line. Some indicators have formed buy signals.

The bullish momentum may continue in case AUDJPY exceeds the last fractal high and the upper Bollinger band at 76.9. This level may serve as an entry point. The initial stop loss may be placed below the last fractal low, the lower Bollinger band and the Parabolic signal at 73.7. After opening the pending order, we shall move the stop to the next fractal low following the Bollinger and Parabolic signals. Thus, we are changing the potential profit/loss to the breakeven point. More risk-averse traders may switch to the 4-hour chart after the trade and place there a stop loss moving it in the direction of the trade. If the price meets the stop level (73.7) without reaching the order (76.9), we recommend closing the position: the market sustains internal changes that were not taken into account.

Fundamental Analysis

The US and China signed the phase one trade deal. Will the AUDJPY rise?

Such dynamics are observed in case of the strengthening of the Australian dollar and weakening of the Japanese yen. China is the main trading partner of Australia and the main economic competitor of Japan. The signing of the agreement with the United States may strengthen the Chinese economy, which, in turn, may support the Australian dollar. An additional positive factor for it may be rainy weather in eastern Australia, which reduced the area of bushfires. Important labor market data for December, as well as 3 PMI indices (industrial, composite and service industries), will be released next week in Australia. The strengthening of China and risk reduction in Southeast Asia are rather negative factors for the yen. The Bank of Japan meeting will take place on January 2. No rate changes are expected. In addition, later next week, data on foreign trade and inflation for December will be released in Japan. Preliminary forecasts are negative.

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