The Australian dollar is trading lower against the Japanese yen, as the AUDJPY pair cleared an important support level to trade lower. There was a critical trend line on the hourly timeframe for the pair, which was breached earlier during the Asian session. This break can be seen as crucial as it gives sellers a reason to gain momentum in the short term. Moreover, the pair is trading below both important hourly simple moving averages – 200 and 100.
Currently, the pair is flirting with the 61.8% fib retracement level of the last move higher from the 94.94 low to the 96.14 high. If the pair fails to hold the mentioned fib level, then a move back towards the previous low would be on the cards. Any further weakness will depend a lot on the strength of the Japanese yen.
Alternatively, if the pair manages to jump higher from the current levels, then the broken trend line might act as a resistance for the pair. If sellers fail to defend the trend line, then buyers might push the pair towards the 200 hourly SMA.
The RSI on the hourly timeframe is around the extreme levels, which points that a short-term bounce is possible in the sessions to follow. However, any correction or retracement can be seen as a selling opportunity if the pair stays below the 200 hourly SMA.
Australia’s New Motor Vehicle Sales data
Earlier during the Asian session, the Australia’s New Motor Vehicle Sales data was published by the Australian Bureau of Statistics. The outcome was on the positive side, as the report mentioned that the New Motor Vehicle Sales has increased by 0.3% in May 2014, compared with April 2014.
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Posted By Simon Ji of IKOFX
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