Technical Bias: Bearish
Key Takeaways
“¢ Australian dollar continued to rise against the Japanese yen, but a short term top looming in the AUDJPY pair.
“¢ 98.15 hold the key for a move lower in the near term.
“¢ AUDJPY support seen at 98.15 and resistance ahead at 98.70.
The AUDJPY pair climbed more than 500 pips recently without a meaningful correction, which has escalated the possibility of a retracement moving ahead.
Chinese Trade Balance
Earlier during the Asian session, the Chinese Trade Balance was released by the General Administration of Customs of the People’s Republic of China. The report mentioned that the Chinese exports grew by 9.4%, down from 14.5%. The forecast was of an 8.0% rise. The trade balance figure was on the higher side with a reading of $49.83B, up from the previous reading of $47.30B. The release helped the Australian dollar to retain the ground. The pairs like AUDUSD and AUDJPY were seen consolidating in a range since the start of the session.
Technical Analysis
There is a critical bullish trend line preceding from the 93.91 low, which has held the downside in the AUDJPY pair time and again. However, the pair looks like exhausted on the 4 hour timeframe, which means there is a chance of a larger correction in the near term. If the yen buyers manages to break the highlighted trend line which also coincides with the 23.6% Fibonacci retracement level of the last leg higher from the 96.47 low to 98.67 high, then a move towards the 50 simple moving average (SMA) – 4H is possible moving ahead.
On the upside, initial resistance can be seen around the recent high of 98.67. A break above the mentioned level might call for a move towards the 99.20 level.
Overall, one can attempt a sell trade if the pair successfully breaks and closes below the 98.15 level.
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