October 05, 2018
The Australian Dollar (AUD) against the Japanese Yen (JPY) is an exciting pair for its relation to risk. The pair is frequently among one of the most highly correlated pairs to price action in US equities on a short to medium term basis. The pair has a propensity to rise in a low risk environment on carry flows while the opposite is true when we see a ‘risk-off’ approach in the markets.
From an intermediate term prospective we can notice that pair is trading in a downtrend market and in a downtrend market there is saying that sell on high will be profitable strategy. Well presently pair is trading below all the major and minor EMA lines and sustaining below 200SMA line. However, we have seen some correction in the pair after making the low of 78.67 level but now it seems that pair is again retesting the same level once again. A daily closing below the previous swing’s low i.e. 78.67 level will open the way towards the 77.50 level in near term.
If other thing remains constant, it is likely that the Australian Dollar continues to lose against the Japanese Yen during the following trading sessions. The next targets for the pair could be the 78.57 level. Two consecutive bearish marabuzo candlesticks are providing us bearish signal. Odds are in favor of bears and intraday bias remains bearish on the pair. A bearish crossover on MACD indicator is favoring the bears and providing us bearish signal for the time being and RSI is also providing trend reversal signal i.e. bearish signal. The 82.50 level is immediate resistance level followed by 83.90 whereas 79.10 level is strong key support level followed by 78.00 level.
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