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Previewing AUDJPY for the Week of August 12, 2018

AUDJPY has been flirting with a Support Zone for nearly five months and has been in a consolidated range of nearly 400 pips since February 22, 2018.  AUDJPY has seen ranging zones like this in the past, which does not make this current period any different from the past price action of the currency pair.

AUDJPY Daily Chart

80.718 is the high of a narrow Support Zone band that has three times previously rejected short positions and pushed bullish moves within the ranging zone.

The RSI has yet to cross under the 30 mark and yet the price is currently higher than it was when the RSI did cross under the 30 on a 10 period RSI chart.

The AUDJPY Daily Chart still points in a bearish direction as the price is below both the SMA 200 and 50 in a post-Death Cross phase.  February 22, 2018 was when the Death Cross was triggered and the price is still lower than the price at that given time.

The Resistance Zone at 82.686 held up as the flight to the Japanese Yen took place when there was a flight for stability in the wake of fears in Turkey, but it was not enough to take out the Support Zone on a Daily Chart.

AUDJPY 4 Hour Chart

A 30 pip Support Zone is where the price nearly resided on a 4 Hour Chart and just below this Support Zone is a 20 pip Support Zone.  At this point, if the price cracks through both the only thing keeping the price from reaching the mid-70s is a psychological price point at 80.

AUDJPY is below 30 on RSI, which indicates that it is oversold and it was oversold one of the two most recent occasions the price was in the existing Support Zone.  The price eventually worked its way up out of the zone and toward a Resistance Zone at 83.837.

AUDJPY 1 Hour Chart

The 82 price point served as a level of Support for late July through early August, but this changed on August 10, 2018.  Strong resistance and support can be broken by major news, even when it is in a completely different region and it involves an unrelated currency.  The Japanese Yen was the safe harbor during times of possible uncertainty.

The price is just coming out of oversold territory on the Relative Strength Index, which seems to indicate that the price that is now out of the Support Zone is ready to make an upward move at least in the short term.

What to Look For:  Pricing Storylines

  • Can AUDJPY fall below 80?
  • Will there be any bullish bounce to potentially near the 82 level?
  • How long does this ranging zone last?
  • Will a positive development coming out of Ankara change the trajectory to weaken the Japanese Yen?