AUD/JPY Weekly Outlook - August 11 to 15, 2014
AUD/JPY dropped sharply during the last week to touch 93.93 but jumped up on Friday to close for the week at 94.65.
The highlight of the last week was a move below the support of 94.39. This move indicated a break of the recent sideways range and hence bearish sentiments. However, the price-action did not sustain below that level and support came just below the 200-day moving average. Hence the initial outlook still stays neutral for the next week as long as the price-action does not break below 93.61 decisively.
On the downside a support is expected in the range of 93.61 to 93.68. This range is derived from the Fibonacci retracements of the overall upward move from 74.48 to 105.43 and the subsequent downward move from 105.43 to 86.41. As the chart posted below indicate, 93,61 is the 38.2% retracement of the moves from 74.48 to 105.43 and 93.68 is the 38.2% retracement of the fall from 105.43 to 86.41. It is interesting to note that the recent sideways moves have been almost within the resistance of the 50% retracement and support of 38.2% retracement of the later. The charts below indicate that the retracement levels for both of the mentioned cases have been guiding the price-action for AUD/JPY and we expect that trend to continue in the days to come. A breakout is expected sooner or later and such a break out will set the direction for AUD/JPY.
On the upside we expect resistance in the range of 95.00 to 95.29. If this resistance holds and a break below the recent 93.93 takes place then further fall will be expected, first towards 93.69 support and in case not only that support but the support of 93.61 fails then the decline should extend towards 93.04. Our overall outlook will stay neutral for AUD/JPY till the price-action stays over 93.04. Any failure of that support will have larger implications for deeper declines which may expend towards 91.80/92.00 and then possibly 91.05 to 91.20 support zone.
If the support over 93.61 holds and a decisive break over 95.29 takes place then it will indicate a near-term bottoming to bring upward consolidation. However, we will still stay neutral for the upside as long as the resistance of 96.51 holds. Overall a failure of this resistance will be required for the currency pair to target 98.16 next.
Analyze Yourself - Various views of AUD/JPY Price-Action