GBP/JPY Vs GBP/USD and USD/JPY – March 6th, 2021

GBP/USD last week fell 236 pips from 1.4015 to 1.3776 while overbought GBP/JPY rose 257 pips from 148.14 to 150.71.

Known since the 1930’s, the Japanese pegged GBP/JPY to UK Gold for not only economic viability but the first incursion to the western world of finance. The standard to hold GBP/JPY to the UK held throughout Bretton Woods. Upon the 1972 free float, GBP/JPY became attached permanently with high +90% correlations to GBP/USD.

All JPY cross pairs followed with high and positive correlations as AUD/USD and AUD/JPY, NZD/USD and NZD/JPY, EUR/USD and EUR/JPY while USD/CAD and CAD/JPY became polar opposites as both permanently correlate negatively. USD/CHF and CHF/JPY traditionally also hold opposite correlations.

The Japanese offered not only a double trade but GBP/JPY and GBP/USD as the same exact currency pairs. The same principle holds true for EUR/JPY and EUR/USD, AUD/USD and AUD/JPY and NZD/USD and NZD/JPY. The double trade is permanent for USD/CAD and CAD/JPY.

Why JPY cross pairs remain overbought into week 6 amd not falling with counterpart currencies is the USD/JPY problem to correlations. While GBP/USD correctly correlates to GBP/JPY at +94%, GBP/JPY also not correctly correlates to USD/JPY at +83%. A further problem exists as GBP/USD correlates to USD/JPY at +46 %. All correlations are not only running positive but this situation is the exact same for AUD/JPY, NZD/JPY, EUR/JPY, CAD/JPY and explains why prices remain high and overbought.

Positive correlations are the result of exchange rate prices and relationships to moving averages since correlations are found within the context of averages. USD/JPY trades above vital 105.70,  GBP/USD above 1.3697 and GBP/JPY above 144.80. Correlations are positive because prices trade above respective high / low averages.

Required to assist GBP/JPY to drop is GBP/USD breaks 1.3697 or USD/JPY trades below 105.70. GBP/JPY then decides to fully correlate to USD/JPY or GBP/USD. GBP/JPY in every instant follows GBP/USD as the 91 year correlation and order of currency markets.

Current GBP/JPY trades 1156 pips above GBP/USD and 2506 pips below GBP/CAD. GBP/JPY larger range from GBP/USD becomes 144.08 and 1.5564. GBP/JPY above is located the 14 year average at 155.38 and the 10 year at 148.36.

Prior to the 2016 interest rate changes by the central banks, the market order to currency pair arrangement existed as GBP/USD, GBP/JPY, GBP/CHF then GBP/CAD.

The new order is arranged as GBP/CHF, GBP/USD, GBP/JPY then GBP/CAD and seen as GBP/CHF 1.2855, GBP/USD 1.3820, GBP/JPY 149.86 or 1.4986 then GBP/CAD 1.7292. Much daylight exists for GBP/JPY to trade freely between GBP/USD and GBP/CAD yet 250 pips traded last week from a distance of 1100 and 2500 pips between exchange rates.

Why GBP/CHF and all currency  pairs arranged as Other Currency / CHF dropped from contention as support is due to the uniqueness to the SNB’s interest rate system. Libor is miles from actual interest rates as first comes Saron, Call Money rates and the most vital Debt Register Claims.

JPY cross pairs overall contain downside moves from GBP/JPY at 300 pips and 200 for AUD/JPY and NZD/JPY.

USD/JPY for the week is not only light years overbought but the 5 year average is located at 109.01. A good target is found at 106.65.

GBP/JPY big break lower is located at the 10 year average at 148.38. A break then GBP/JPY trades 146.00’s easily.

GBP/USD this week opens between 1.3768 and 1.3840. Below 1.3768 challenges most vital 1.3697, above 1.3840 then GBP/USD travels much higher.

GBP/CHF and GBP/CAD run good and positive correlations at +93% and +96 % for GBP/CAD. For GBP/NZD and GBP/AUD remain problems as correlations run negative at -43% and -64% for GBP/AUD.

GBP/JPY

Included are GBP/JPY moving averages from 5 day to 253 days. The averages are perfect and derived from the ECB. The first number is the day average followed by trading days then the average.

A 20 day average is actually 15 days, a 50 day average is actually 36 days. Trading day averages to factor perfectly start at the beginning of every year then the numbers increase as days trade. A 50 day average is most stable as it only trades 36 to 50 days.

A 5 day average begins Monday at 2 days, then 3 for Tuesday and Wednesday and 4 for Thursday. A full 5 day average only trades on Fridays.

5 Day     5             149.2391

10 Day  9             149.1325

20 Day  15           148.3808

50 Day  36           145.2691

100 Day               71           142.5398

200 Day               143       139.9417

253 Day               180       139.1231

As GBP/JPY trades lower then the averages drop.

Targets

Targets are not only known miles ahead but targets stack to watch trades unfold.

Current targets: 149.7549, 149.8496, 149.5086, 148.1852, 146.0887, 143.7901, 143.0356.

The ECB and most central banks factor exchange rates to 6 decimal places and 4 for USD/JPY and JPY cross pairs and I follow the ECB exactly.

EUR/USD Vs USD/JPY, Close Prices and Next Week

EUR/USD most significant high/ low point is located at 1.2026. A break however at 1.2020 represent a wholesale trend change for a lower EUR/USD. Current EUR/USD trades above 1.2026.

USD/JPY on the other side trades above its significant high/ low point at 104.72. Both EUR/USD and USD/JPY are mis aligned. Either USD/JPY remains above 104.72 and trades higher or EUR/USD must break below 1.2026 and 1.2020 to trade much lower to 1.1700’s. In the interim, both pairs are in a standoff.

Noted from USD/JPY constituents, USD/CAD trades below its high / low point at 1.2867 and USD/CHF below 0.8980. USD/JPY remains the outlier USD pair for the past two weeks.

From the January 3rd long term forecasts, the next major USD/JPY inflection point is located at 106.00 exactly and USD/JPY traded to 105.75 then dropped. While 106.00 above represents the next break, below is located the 10 year average at 103.33 and a 267 pip range.

EUR/USD however must break below its 10 year average at 1.2107 to target the vital breaks at 1.2026 and 1.2020. Above is located the 14 year average at 1.2625. As EUR/USD trades above 1.2107 then the wide range becomes 1.2625 to 1.2107 and a 518 pip range. EUR/USD overall hasn’t changed its 518 pip range since January 8 as important MA’s are dropping simultaneously.

Most important point at 1.2625 however is dropping ever so slowly week to week as is 1.2107. A much lower EUR/USD is ahead in weeks to come.

Between 1.2107 and 1.2624 exists minor daily and weekly trade points.

USD/JPY however above 106.00 exists a vital average every 100 pips until the 5 year average at 109.09. USD/JPY’s counterpart due to the exact same pair is CHF/JPY and it trades above 116.20.

For USD/JPY today, best shorts are located at 105.37 and 105.30 to target 104.90. Longs are located at 104.31 and 104.37 to target 104.64. The break at 104.72 however represents a lower USD/JPY next week.

EUR/USD close price today is forecast at 1.2109 and below 1.2137. This places EUR/USD next week between 1.2082 to 1.2137 for next week.

USD/JPY above 104.72 represents a problem for AUD/JPY as it trades above its 5 year average at 79.70 and NZD/JPY trades above its 10 year average at 75.42. Both are mandatory breaks for AUD/USD to trade lower and break its vital MA at its rising line at 0.7557 and NZD/USD 0.7070.

Any price today for AUD/JPY ar 81.57 is a good short to target 81.17 and today’s close price is forecast at 80.96.

Not only are all JPY cross pairs richter scale overbought but most trade near vital inflection points. EUR/JPY 128.24 is next above Vs below at 125.93 or a 231 pip range. Close price forecast today for EUR/JPY at 126.83 places EUR/JPY at perfect neutral to begin next week.

GBP/JPY trades deeply overbought between vital 5 and 10 year averages at 142.47 and 148.27. Good short today is found at 145.26 to target the close price forecast at 144.08. Quite a distance for a Friday. Above 144.08 then GBP/JPY remains deeply overbought heading into next week.

Overbought GBP/USD forecast close price is located at 1.3741. Shorts today are located at 1,.3866 and 1.3857 to target 1.3772 then 1.3741.

For oversold EUR/CAD, next week 1.5471 high/ low point we’re watching closely.

For high flyer and wide ranger GBP/AUD net week 1.7900 represents the big break. 1.7900 broke this week and traded to 1.7785. EUR/AUD and GBP/AUD’s counterpart must break 1.5923 to trade higher. GBP/AUD break at 1.7900 represents an alignment to EUR/AUD as both now trade below respective MA’s.

For oversold USD/CAD, close price today is forecast 1.2753. Shorts today are located at 1.2787 and 1.2773 to target 1.2731 then 1.2696.

Oversold EUR/GBP trades just above its 5 year average at 0.8725.

S&P bottom and long entry is located at 3896.71 and just ahead of 3861.36. Long target is located at 3906.58 for a quick 10 point trade today.

DAX today must trade back to at least 13970.70. Note most vital today at 13926.28 then 14029.00, 14084.78 then 14156.47. Above 13970.70 targets 14029.00.

 

GBP/JPY Price Forecast – British Pound Fails to Break Through Resistance.

The British pound has rallied a bit during the trading session on Wednesday, but continues to struggle with the ¥142.50 level, as we have pulled back significantly from that level. Nonetheless, this is a market that will continue to be supported underneath, as there are plenty of buyers on dips from everything that we have seen. The more, I do think that the “risk on trade” will probably continue to be the favored one, but we have a lot of work above that we need to get through.

The ¥140 level underneath continues to be rather important from not only a large, round, psychological important figure standpoint, but the fact that it has previously been both structurally supportive as well as resistive. Because of this, I think that we probably get a short-term pullback towards that area before we may get a bit of extended buying pressure. The 50 day EMA sits just below the ¥140 level as well, so that makes that area interesting from that standpoint. Furthermore, the trend has clearly been to the upside when it comes to the British pound in general, so there is no need in fighting that.

It appears that the trend is trying to build up enough momentum to go to the upside even further, so even though this candlestick suggests that we are going to fall in the short term, I do not like the idea of shorting this pair, rather I think that we are more than likely going to continue to see a deaf opportunities to buy the dip that it is exactly what we should be doing over the longer term.

For a look at all of today’s economic events, check out our economic calendar.

Dollar’s Weakness is Back

Gold creates a double bottom formation with two hammers on a daily chart.

Nasdaq and DAX bounce from the upper line of a correction pattern.

Dollar index cancels the Inverse Head and Shoulders and drops lower.

EURUSD starts bullish correction.

AUDJPY is heading higher after testing the neckline of a giant iH&S pattern.

USDCHF bounces from the neckline and drops lower with a proper sell signal.

CADCHF goes lower after the false bullish breakout from the symmetric triangle.

For a look at all of today’s economic events, check out our economic calendar.

Dollar Tries a Reversal. Indices Still Hold Up High

Fear&Greed Index points towards a bearish movement.

Put/Call Ratio as well.

Gold still in positive territory despite the recent drop.

Dax settles above 13800.

SP500 bounces from the 3780.

Dollar tries a reversal.

EURUSD touches the long-term up trendline.

EURJPY breaks and settles above a major horizontal resistance.

AUDJPY finally breaks the neckline of the iH&S formation.

For a look at all of today’s economic events, check out our economic calendar.

Great Occasions on The JPY

The Santa rally is here; indices are skyrocketing with the DAX finally hitting all time highs. Pretty remarkable if you ask me but in today’s analysis I will focus on the Japanese Yen, which is part of three very interesting setups.

Let’s start  what I believe is the best pair, the EURJPY. Here, we definitely have a positive sentiment, which originally started with the inverse head and shoulders pattern in Q4. After the price broke the neckline, we got a very nice upswing followed by a flat correction shaped like a rectangle. Yesterday, the price broke the upper line of the resistance and today, for the first time since August, it’s trading above the major horizontal resistance of 126.7. Once the price closes above this resistance, we’ll get a proper buy signal.

Now the AUDJPY, where the price is preparing for a major buy signal. First of all, the AUDJPY broke the crucial long-term down trendline, connecting lower highs since 2014. Furthermore, the price created an inverse head and shoulders pattern and the price is currently trying to break the neckline. A breakout from that resistance level would trigger a proper long-term buy signal.

Finally the USDJPY, a combination of two weak currencies, which leads to a sideways. Recently, the price bounced from a combination of dynamic and horizontal resistances. If the price stays below those resistances, there’s no buy signal. We will however see a buy signal if one of two scenarios plays out; either if the price manages to close the day above the two resistance levels, or a if there’s a breakout of the mid-term dynamic support connecting higher lows since mid December. As for now, we’ll wait, the signal will most likely come soon.

For a look at all of today’s economic events, check out our economic calendar.

Indices and Commodities Climb Higher

Commodities are enjoying the weaker USD and advancing higher.

Indices also going up, not disturbed even by new lockdowns.

EURUSD is about to test crucial horizontal resistance.

EURJPY in a sideways trend below 126.7.

AUDJPY with an inverse head and shoulder and breakout of a long-term down trendline.

USDCAD still near lows after the breakout of major horizontal support.

GBPCHF with a breakout of the lower line of the triangle.

EURAUD with a possible false bearish breakout from the rectangle.

For a look at all of today’s economic events, check out our economic calendar.

Commodities Up, Dollar Down Ahead of The NFP

Gold tests 1850 USD/oz resistance

Oil breaks the upper line of the flag and aims higher

American Indices keeping close to the all-time highs

European Indices, on the other hand, performing slightly worse

Dollar Index going deeper again

EURUSD continuing a great upswing

EURJPY testing important horizontal resistance. Double top possible

AUDJPY bounces from the neckline to test important horizontal support

USDCAD continues the downswing after breaking crucial horizontal support

For a look at all of today’s economic events, check out our economic calendar.

Buyers Try to Stop This Bearish Madness

 

DAX broke the lower line of the wedge

CAC broke the lower line of the triangle

NASDAQ creates inverse head and shoulders pattern

SP500 bounces from the 38,2% Fibonacci

Dollar Index creates double top formation just above crucial resistance

EURUSD and GBPUSD try to initiate a bullish reversal with the double bottom formations

EURPLN finally escapes from the triangle to the upside

AUDNZD tests the broken support as a resistance

AUDJPY with the false bullish breakout and the head and shoulders pattern

For a look at all of today’s economic events, check out our economic calendar.

Indices and USD Climb Higher

DAX aims higher after the breakout of the upper line of the flag

CAC is getting closer to the upper line of the triangle

SP500 avoids the drop after the bearish head and shoulders pattern

Gold drops and aims long-term up trendline

EUR/USD is about to test a combination of crucial supports

AUD/NZD makes contact with important horizontal level

CAD/CHF breaks the upper line of the ascending triangle pattern and aims higher

AUD/JPY with a very similar situation

Triangle Formation Will Show You the Direction

In today’s trading sniper I would like to show you the power of triangle patterns and I will do it using rather exotic currency pairs. Triangles, especially ascending and descending ones are super powerful formations, which can be a reliable and trustworthy friend of every technical trader.

First instrument is the CADCHF, where we have a beautiful ascending triangle pattern. This is promoting a breakout to the upside and it is happening as we speak. Since today, the price couldn’t break the 0.693 resistance. The first day of September brings us an attack and in consequence a breakout which leads to a mid-term buy signal.

An example how effective an ascending triangle can be is seen on the AUDJPY chart, where the ascending triangle has been present since June. Last week, the price finally broke the 76.6 resistance, which brought us a legitimate buy signal. Sentiment here is definitely positive.

Triangles can work both ways, the two previous examples were of ascending triangles with a horizontal resistance and now I will show you the descending version of this pattern – with a horizontal support. It can be spotted on the EURNOK, where the price is going lower since the end of March. A recent breakout of the lower line of the triangle gives us a proper sell signal. Sentiment here is negative.

For a look at all of today’s economic events, check out our economic calendar.

NZD and AUD On The Rise

In today’s analysis we will focus on the currencies from antipodes. We will give a break to the index traders as summer holidays combined with Independence Day in the United States can result in very low volatility and overall a boring session on the global indices. Recent optimism and relatively good situation in China are definitely helping the AUD and NZD. Thanks to that, we do have very interesting setups on the pairs with those currencies.

Let’s start with the Kiwi, NZDUSD. The pair escaped from the triangle pattern with the bullish breakout off its upper line. That gave us a mid-term buy signal. Now, the pair has to confirm this sentiment by breaking the horizontal resistance on the 0.653. The sentiment here is positive.

Taking a look at the Aussie, AUDUSD, the price is still inside of the symmetric triangle pattern. Friday brings us another bullish attempt and it looks like the resistance will be finally broken. Pressure from the buyers looks serious and the chances that they will succeed are quite high.

On the AUDJPY, the breakout of the resistance already happened, so the buy signal here is already up and running. As long as the price stays above the upper line of this formation, the sentiment is positive.

For a look at all of today’s economic events, check out our economic calendar.

USD/JPY Price Forecast – US Dollar Looking for Buyers Against Yen

The US dollar has cracked below the ¥107 level during the trading session on Thursday, as we continue to see a lot of negativity out there. After all, the Dow Jones Industrial Average futures are down about 900 points at the open, and this typically favors this pair falling due to the fact that the market starts looking for safety in the form of the Japanese yen. If we can continue the momentum, the next support level is closer to the 160 and level.

USD/JPY Video 12.06.20

On the other hand, if the market saved itself yet again, then it is likely that we will go looking towards the ¥107.50 level, and then after that go looking towards ¥108. Moving above the ¥108 level allows for the market to go looking towards ¥109, and of course followed by ¥110. I do not necessarily think that we are suddenly going to rally, but then again it is easy to say what we “should” and” should not do”, because quite frankly the markets have not been paying attention to any of that for a while.

With this being the case, I continue to use this pair more or less as a Japanese yen strength or weakness indicator, and not necessarily trade it directly. At this pair continues to fall hard, then it is possible to short other pairs that will give you a little bit more momentum like the AUD/JPY pair, NZD/JPY pair, CAD/JPY pair, and so forth. This pair is a little congested and noisy, which makes quite a bit of sense considered both currencies are thought of as “safety currency.”

For a look at all of today’s economic events, check out our economic calendar.

Is There A Strategy To Make 20 PIPs Per Day?

As far as strategies goes, there’s so many different strategies out there, in terms of exit, and, entries and exits, in terms of a technical strategy.

The way that we find gives us the highest probability opportunity to make pips from the market, every day, is just by following the daily sentiment. Now, whether that’ll give you five pips for that day, whether it’ll give you 10 pips, 20 pips, 100 pips, it really does depend on the type of sentiment. It really does depend on the type of trade that you take. Also, the underlying volatility of the market.

So, looking at something like the Aussie-Yen. Normally, in a day trade, like the Aussie-Yen, due to much lower volatility ranges, we would expect to make anything, from, or would be happy to make anything, from, let’s say 10 to 30 pips, on a normal, standard day trade like this one, today.

But, because we’ve seen all those massive moves in the market, traded recently, due to the, basically, the run up to the recession, and those big moves we saw in equities, if we just look at this range for today, we can see, it’s almost a 60 per branch to the downside, which is quite a lot for just a standard day trade.

So, it really does depend on quite a couple of factors.

There isn’t a strategy, especially technically speaking, that can guarantee you any type of, you know, set pip range per day. 10, 20, 30 pips, etc. A trader out there that tells you, you know, you will make 10 pips, every single day by trading this strategy, you know, I would be, I would be very confident in saying that they are not being honest.

If they are trying to sell something like that, a strategy that gives you 20 pips, every single day, every single market environment, timeframe, etc, isn’t being honest.

For us, the highest probability of looking at, basically, taking pips from the market, every day, is making sure that you’re staying on the right sentiment, the fresh sentiment, every single day.

Whether it is trading the Aussie-Yen, like, in an example, for today, in terms of risk of trading, whether we are trading, you know, any other sentiment-type of shift.

Whatever the market is focused on today, whatever is driving the markets today, we prefer to focus on those things, as we think that provides you with a much higher probability of staying on the right side of the market, and ensuring that you extract pips from the market on a daily basis.

Now, that is important, also, because, there might be some days where there just isn’t any high probability sentiment driving currency prices. Now, on those days, the very best of traders are the ones that are gonna be patient, and know that this isn’t an environment to trade in. I’m rather gonna sit out, and wait for a clear catalyst, a clear short-term driver, to, for the next highest probability move.

In days where there’s just nothing driving the markets, on those days, it’s better to stay out, because you might trade something, and you’ll just get a range-bound market, or you’ll be whipped around, in terms of price action. So, there might be some days where you get nothing.

There might be other days where there are ample trading opportunities.

On a day like today, there’s quite a couple, not only looking at the Aussie-Yen, you could’ve considered the Aussie-Swiss, the Kiwi-Yen, Kiwi-Swiss, CAD-Yen, Kiwi-Swiss, a CAD-Swiss, I mean.

So, there’s a couple of opportunities when we have strong sentiment driving the markets, but nothing that will guarantee you a set amount of pips, every single day, in every market environment. So, I hope that helps you out there, Bobby.

For a look at all of today’s economic events, check out our economic calendar.

This article was written by Arno Venter, ForexSource.

Bullish Equities = Bullish AUD/JPY

Dear Traders,

The AUD/JPY is the best pair to compare Equities with as the excellent correlation exists on all time frames.

At this point, the AUD/JPY wants to make a continuation move towards 69.52, daily camarilla pivot. If the market manages to close above, we should see a continuation of the confluence target, which is 69.75. We can also see the ATR projection up there. Only if the trend line breaks lower, we might see a deeper correction down as the AUD/JPY is strongly bullish.

The Analysis has been done with the CAMMACD.Core and Sit Systems

 

USD/JPY Price Forecast – US Dollar Breaks Down Slightly Against Japanese Yen

The US dollar dropped a bit against the Japanese yen during early trading on Monday as most banks around the world were closed. Ultimately, it seems as if the market is drifting a bit lower towards perhaps the ¥107 level. If the market breaks down below there, then it’s likely that the next target will be the ¥105 level, possibly even the ¥102 level. In the short term, I believe that the market will continue to be very choppy, but overall I feel that this pair is a bit more neutral than anything else. I think at this point we are probably looking at a scenario where you can probably use this chart as an indicator of Japanese yen strength or weakness. Ultimately, I think that this is best used as a way to decide how to trade other pairs like AUD/JPY and EUR/JPY.

USD/JPY Video 14.04.20

I believe that the upside is probably protected by the ¥111 level, extending to the ¥112 level. If we were to break above that level, then we certainly could go much higher. I am a bit suspicious about any move towards that area, because it would certainly be a major “risk on” environment, something that has supposedly been thrown into the marketplace due to the Federal Reserve and all of its injection of liquidity, but notice how this pair has moved along with that. Something isn’t quite right so it’s best to leave this particular pair alone in the short term.

Playing the S&P500 Through FX – the AUD has Found its Mojo

We can also consider the notion that the RBA has been active in cutting its daily bond purchases from $5b p/d to $1.5b p/d and that may also be another factor boosting the AUD of late.

Source: Bloomberg

If I look at the technical set-up of the S&P500 it looks like the benchmark heads towards the 50-day MA (2919) in the near-term, and the pain trade in the market is clearly higher. Liquidity is at the heart of the move

  • Top pane – white – Feb excess reserves, blue -RBA excess cash, orange – ECB excess liquidity
  • Lower pane – blue – global money supply, yellow – S&P500
Source: Bloomberg

I like the outperformance from small over large caps, cyclical over defensive sectors, and even companies with levered buybacks are outperforming the S&P500 – until we start to see earnings roll in, I would not want to be short the S&P500 here. Although, we have event risk in spades today, with weekly jobless claims (consensus 5.5m claims) and Fed chair Powell speaking on the economy.

Traders are also getting excited about today’s OPEC meeting (commences at 3pm London time), with Kuwait suggesting we could see up to 15m barrels of crude output being cut. Russia has committed to a cut of 1.6m barrels. The sticking point being how the cuts will be distributed through OPEC nations, and how involved the US will be, or whether they even go down the tariffs route. Oil could easily be 10% higher or lower by the end of the day, but one suspects it will influence the S&P500 and the AUD by proxy.

Here, we see S&P500 10-day realised volatility (white) has collapsed, but at 59% details the S&P500 is moving 3.71% a day (over the past 10 days). Implied volatility has dropped hard from 77% to 37% (although the VIX index sits higher at 43%), which suggests the market still sees daily moves of some 2.3%. Either way, vols are painting a picture of calmer conditions, although, they’re not at levels which tell us we are firmly out of the woods by any means.

Source: Bloomberg

AUD the strong

The reason I have singled out the AUD, is that it is strong – simple as that. If you believe you can obtain an edge by keeping things simple in FX trading by buying strong and selling weak, albeit assessing how mature that move is, then the AUD has found its mojo. That said, if you look at the weekly commitment of traders (CoT) report as a loose guide on positioning, with non-commercial accounts holding a short position of 31,664 contracts, so, clearly the recent rally has been part driven by a position readjustment.

The technical set-ups

All of these positions are a play on the US500 moving higher, as the correlation suggests, and while I feel there could be downside risk next week when earnings start rolling in, the pain trade in the short-term, as I say, is higher.

AUDJPY – marries the weakest and the strongest and the look on the daily is certainly compelling. Price is just breaking horizontal resistance, with the 5-day EMA portraying the move, and that may define a more aggressive move higher. If price is to trend, traders will lean into this average especially when the impulsive move is in its infancy, but if this kicks higher I’d follow.

AUDUSD – finding sellers into the 61.8% retracement of the March sell-off, after a break of 0.6212 high. Watch price action around the fibo, but a break here and I’d be holding for 0.6350.

EURAUD – Price has broken below the 61.8% retracement of Feb-March rally at 1.7510 and maybe headed into trend support. Conditions are oversold, and we watch for a turn in stochastic momentum, but unless we see a sharp turnaround in market dynamics, rallies are to be sold

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Chris Weston, Head of Global Research at Pepperstone.

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USD/JPY Price Forecast – US Dollar Quiet Against Japanese Yen

The US dollar has gone back and forth against the Japanese yen, showing signs of confusion at this point, as the market is dancing around the 200 day EMA and the 50 day EMA simultaneously. The moving averages of course will cause a lot of confusion as the markets look to them for guidance on longer-term charts. That being said, this is a market that is confused to say the least, so at this point I think it’s very difficult to make a position play based upon this chart right now, so I think it’s ultimately a chart that should be used as a secondary indicator for the strength or weakness of the Japanese yen. In other words, if we see this market break down, then I think what you might want to do is start looking towards trading the Japanese yen against other currencies.

USD/JPY Video 10.04.20

For example, if you see weakness in the Australian dollar, then you should be shorting the AUD/JPY pair if this chart is also falling. On the other hand, if the pair rallied significantly from here, it’s possible that the AUD/USD rising as well triangulate towards a long position in the AUD/JPY pair. In other words, this chart is essentially a tool at the moment, not necessarily a market that we should be looking to trade per se. The ¥111 level above is an area where I could find sellers, and therefore would be looking for short positions. On the other hand, the ¥105 level underneath should offer plenty of support. At that point I would be looking for buying opportunities.

AUD/USD Price Forecast – Australian Dollar Crashing Towards the Lows

The Australian dollar initially tried to rally during the trading session on Thursday but give back the gains as we started to see a lot of negativity out there. Ultimately, this is a market that requires a certain amount of risk appetite but if we break down below the 0.60 level is very likely that we go crashing into the 0.58 level. This will be about whether or not there is going to be demand for global trade, and quite frankly with the shocking initial jobless claims figures coming out the United States, that’s a huge hit to global outlook as far as demand will be concerned.

AUD/USD Video 03.04.20

In order for this pair to suddenly look strong again, we need to clear the 61.8% Fibonacci retracement level which is closer to the 0.6250 level. This has been a strong bounce, but quite frankly it’s a bit of a “dead cat bounce”, at least from a quick visual look at it. I fully anticipate that a lot of fear will enter the market and drive up demand for the greenback. More importantly, it’s difficult to see a driving up demand for the Australian dollar. The greenback will probably win by default in this scenario. Furthermore, there will probably be even more rapid movement in the AUD/JPY pair, which tends to move in the same direction based upon risk appetite. Rallies should continue to offer selling opportunities on short-term charts, but all things being equal it is all about the global coronavirus crisis, which seems to be a long way from ending.

AUD/JPY Bearish Continuation or Bullish Bounce

Dear Traders,

AUD/JPY is overall bearish. The price must remain below 66.00 in order for bears to stay in control.

65.50-60 is the POC zone where the price might reject lower. The first target will be 65.22, and the break below should target 64.60, 64.36 and 63.90. We can see a lot of historical sellers within the POC. However, a bounce above 65.70 might lead the price to a retest of 66.00. If 66 breaks, then bulls should expect a bounce up. Observe it and trade as the AUD/JPY is the best pair which follows the equities correlation.

The Analysis has been done with the CAMMACD.Core and Sit Systems