AUD/JPY: Current 76.94 (Sunday, Aug 14, 2010).

Trend: Volatile sideways.

Outlook: Volatile Sideways – Some more downward move expected.

Please refer daily charts and not short-term charts e.g. hourly charts.

Fundamentals (Recent economic releases):

1) AU: Home Loans release negative as compared to the previous release as well as the expectations.
2) AU: National Australia Bank's Business Conditions and Business Confidence releases negative as compared to the previous releases.
3) AU: Westpac Consumer confidence data much less than the previous release.
4) AU: Unemployment Rate release negative as compared to the previous release as well as the expectations.
5) AU: Employment Change data though better than the expectations but much less than the previous release.
6) AU: Elections in August. This should keep a check on AUD.

7) Japan: The sentiments that Bank of Japan may soon intervene to stop Japanese Yen weakening are fading. But this has to be watched closely as the pressures are mounting.
8) Japan: Not much market moving releases during the past week.

Technicals and market perception:

1) MACD line had been crossing the signal line up and down but stayed over it for some time but crossed below it again. This indicates some more downward movement
2) AUD/JPY had been moving within the Bollinger bands without even touching lower and upper band but broke down the lower band.
3) The break over 78.84 (July 13th high and resistance) gave some expectations for some more upward movement.

Analysis and Approach: AUD/JPY is running in a volatile sideways movement without any clear direction.  Global weak economic picture which always reduces carry trades as well as some political uncertainties because of upcoming elections in Australia should keep AUD in check for some time.

AUD/JPY broke the resistance of 78.88 as mentioned last weekend but could not break above the psychological resistance of 80.00 and fell from much below that level.

Our outlook for AUD/JPY is for volatile sideways movement for the coming days and we will be avoiding any longer-term positions at the current price levels.

Overall till Australia elections are over and the effect of the results settle down, we will not be entering a serious position for AUD/JPY.

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For short term Forex trades, please refer to daily technical analysis for AUD/JPY.

(Please note that the color (colour) codes used to show outlook are for the currency pairs and not any individual currency)