AUD/JPY Possible Bounce Off the Monthly Support

Dear Traders,

The AUD/JPY has reached the final M L5 camarilla level so we might see a bounce in the form of a counter trend move–>

Trade War between the US and China could also result in a lot of positive trade to Australia, as China may stop purchasing US agricultural products and energy from the US. Who is gonna fulfil that surplus? AUS and NZ. If that happens the Australian Dollar should benefit.

At this point technically speaking the AUD/JPY is at the M L5 camarilla looking for a bounce. 76.00-15 is the zone. The first target is 76.48. A close above and we should see 77.42.  Of course, the AUD/JPY is a medium speed moving pair -ATR(5) is 72 pips so it might take some time to get there.  Watch for a continuation of bearish trend only below 75.65.

The analysis has been done with the
CAMMACD.MTF template.

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Many green pips,
Nenad Kerkez aka Tarantula FX
Elite CurrenSea

EURJPY Sinks to Flash Crash Levels as Yen Welcomes Risk Aversion

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This unfavorable development has added another layer of uncertainty ahead of crucial negotiations between the two countries. With fears elevated over trade talks crumbling as Trump prepares to raise tariffs on Chinese goods, investors have scattered from riskier assets to safe-haven investments like the Japanese Yen.

The Yen has warmly welcomed the risk-off mood today, especially when considering how it has appreciated against all major currencies including the Dollar. Focusing on the technical picture, the USDJPY is under pressure on the daily charts with prices trading below 110.00 as of writing. A daily close below this level is seen opening a path toward 109.00.

EURJPY eyes 122.50 support level

Risk aversion has instilled Yen bulls with enough inspiration to drag the EURJPY towards flash crash levels witnessed in January 2019.

The currency pair fulfills the prerequisites of a bearish trend on the daily charts as there have been consistently lower lows and lower highs. A solid breakdown and daily close below 122.50 is likely to encourage a drop towards 121.00.

GBPJPY tumbles below 143.00

The combination of Pound weakness and Yen strength has excited GBPJPY bears this week with prices dipping below 143.00 as of writing. Prices are bearish with further downside on the cards amid the risk-off sentiment. The first key level of interest will be around the 141.50 point.

AUDJPY edges towards 76.00

We remain bearish on the AUDJPY below the 77.50 level. Should prices sink below the 76.00 level, this may open the gates towards 75.00 and lower.

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Yen Bulls gain Confidence

That is the case right now as tensions around the trade wars between China and US are increasing. All three setups are pretty similar to each other and the correlation between them is high.

First one is the CHFJPY, which on Monday, broke the crucial long-term support using the bearish gap. The breakout, from the technical point of view, was promoted by the descending triangle pattern. After the breakout, the price rushed to close the gap and created the pennant formation. Pennant was promoting a further slide and this is precisely what happened. The sentiment right now is definitely negative.

AUDJPY is the second one and here we also had a gap, which allowed to break a major support. In this case, the support is dynamic and connects higher lows since January. Traders managed to close the gap and after that, immediately started to sell. As long as we stay below the black line, bears have bigger chance for a success.

Last one is the GBPJPY loved for its volatility. Most recently, the price managed to break crucial horizontal support on the 143.8, which gave us a proper sell signal. Whole slide was initiated at the beginning of May with a very nice false breakout pattern. When you see this, tell me, how can you not love this kind of setups?

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

AUD/JPY Buying Into Dip Continues

Dear Traders,

The AUD currency basket acts exactly as planned. Today we have a possible upmove continuation in the AUD/JPY.

Due to a higher demand in iron ore ( Australia exports to China) the AUD currency is getting stronger. The AUD/JPY POC zone is 80.05-20 and a pullback within the zone could show up fresh buyers. Coupled with historical buying from the zone, we could see a bounce towards 80.73. If the price makes a close above 80.75, watch for 81.15 – weekly H4 camarilla pivot. The ATR of the AUD/JPY has already been overshot, so it indicates we might see a retracement, but also indicates that the trend is still strong.

AUD/JPY Buying Into Dip Continues

Japanese Yen Tumbles as Risk Sentiment Rebounds

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This can be reflected on the USDJPY which is approaching the 112.00 level as of writing. A solid daily close above this point has the potential to trigger a move higher towards 113.00.

EURJPY bulls eyes 127.40

The EURJPY fulfills the prerequisites of a bullish trend on the daily charts as there have been consistently higher highs and higher lows. Prices are trading above the daily 20 SMA while the MACD has crossed to the upside. An intraday breakout above 126.50 will signal a move higher towards 127.40. If prices fail to keep above 126.50, then the EURJPY is seen sinking back towards 1250.00.

GBPJPY marches towards 147.00

Given how Brexit continues to pressure Sterling, the GBPJPY’s appreciation is clearly based around Yen weakness. A depreciating Japanese Yen should inspire bulls with enough inspiration to target 147.00 and 147.50.

CADJPY breaks above 84.00

The CADJPY is in the process of breaking above the 84.00 resistance level as of writing. With the Japanese Yen poised to weaken further amid the improving market mood, the CADJPY has scope to push higher. A daily close above 84.00 will open the doors towards 85.00 in the short to medium term.

AUDJPY gains momentum above 79.74

There is a classical breakout opportunity in play on the AUDJPY with prices trading above the 79.740 resistance as of writing. For as long as bulls can maintain control above this level, the AUDJPY is seen challenging 80.90 and possibly higher. Alternately, a move back below 79.740 will encourage a decline back towards the lower range of the bullish channel at 77.75

Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

3 False Breakouts that Can Make your Trading Day Better

Well, false breakouts can be great occasions too and actually that is, what we will focus on in this analysis.

The first instrument is the EURUSD, where the false breakout happened quite some time ago, at the beginning of March. After this, the price went significantly higher and is currently aiming the mid-term down trendline. That can be a good occasion for the buyers to capture some profits, which may trigger us a bearish correction.

Next one is the AUDJPY, where we have a false breakout of the horizontal support and from the head and shoulders pattern. That opens us a way for a new upswing. This view is additionally strengthened here by the wedge pattern. All we need to see for a proper buy signal is the price closing above the upper line of the wedge.

Next one is the AUDUSD, where the false breakout is still fresh. The price tried to escape from the flag to the downside but failed. In addition to that, sellers could not break the 0.707 support. That is a positive sign but the legitimate buy signal will be triggered, when the price will break the black down trendline.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

AUD Weakens Creating Two Nice Bearish Setups

There is a market rumor that apparently, RBA will lower interest rates in July and August (both 25bps). This was obviously perceived as a piece of negative information and AUD dropped like a rock almost on every pair. Thanks to this, we do have two interesting setups with this currency.

First one is the AUDJPY, where until yesterday, everything was looking great. We were in the ascending triangle pattern and the bullish flag, which was promoting an upswing. The price even broke the upper line of the flag but that breakout happened to be a fake one! After midnight, AUDJPY went down breaking the lower line of the triangle. That is an invitation to open a mid-term short position.

Another setup can be found on the AUDUSD, where recently, the price created a few nice trading patterns. First one was a small H&S formation, which started the most recent drop. After this, we got a descending triangle, which resulted in a further downswing. This allowed creating a right shoulder of the much bigger H&S formation. As for now, we are on the important support – a neckline but we see big chances for a bearish breakout here.

Last but not least is the CADJPY, where the price broke three important mid-term supports – two dynamic and a horizontal one. Today, we used the two of them as fresh resistances and the price created the shooting star candles. That creates a great bearish opportunity. The sell signal will be denied when the price will come back above the orange area.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

Two Different Signals for the AUD

Today’s setups are a bit weird. How is that possible? Well, it means that second currencies in the pairs are the main drivers of those movements. Let’s see.

We will start with the AUDCHF, where the situation is bearish and the price broke major supports. First of all, AUDCHF broke the lower line of the symmetric triangle pattern. What is more, in the same time, we broke the horizontal support slightly below 0.71. Currently we do have a typical pullback but as long as we stay below those two resistances, the sentiment remains negative.

Second pair is the AUDJPY, where we do have a buy signal. It comes from the fact, that the pair broke the upper line of the wedge pattern and bounced from the upper line of the ascending triangle pattern. The movement towards the horizontal resistance on the 79.8 is very probable.

That brings us to the third instrument. From the above, we can assume that the CHFJPY should be very strong…and it is! The price is in the nice up trend after breaking the upper line of the triangle. Yesterday, CHFJPY broke two major resistances, horizontal and dynamic one. With this, it seems that the sky is the limit.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

Technical Outlook For USD/JPY, EUR/JPY, AUD/JPY & CAD/JPY: 17.01.2019

USD/JPY

USDJPY’s pullback from 109.10-20 is less likely to signal the pair’s weakness unless a sustained drop beneath three-week-old upward slanting trend-line, at 108.40 now, takes place on the four-hour chart. If the pair slip under the 108.40, the 107.70, the 107.00 and the 106.70 support-levels may gain sellers’ attention. Meanwhile, clear break of 109.20 enables the pair to aim for the 109.50 and the 110.00 resistances. In case prices manage to extend its up-moves past-110.00, the 110.25-30 seems crucial to watch as it holds the gate for the pair’s rally to 110.80 & 111.35-40 numbers to north.

EUR/JPY

Inability to cross the 124.85-125.15 region indicates brighter chances of the EURJPY’s another dip to 123.40, breaking which 122.50 could flash on Bears’ radars. Should prices continue trading southwards below 122.50, the 122.00, the 120.60 and the 120.00 might offer intermediate halts during its drop to 118.65. If at all the quote surpasses 125.15 on a daily closing basis, the 125.80, the 126.40 & 50-day SMA level of 127.20 can lure the buyers. Though, a descending trend-line stretched since late-September, at 127.70, may confine the pair’s rise beyond 127.20, if not then 200-day SMA level of 129.10 and the 130.00 round-figure could be targeted on long positions.

AUD/JPY

Not only more than a month old resistance-line, at 78.20, but the 78.50-70 area also challenges the AUDJPY’s upside, which if conquered opens the gate for the pair’s rise to 79.00 & 80.00. However, 50-day & 100-day SMA confluence, around 80.35-45, may limit the advances after 80.00, which if not respected can trigger the pair’s surge to 81.40 level, including 200-day SMA. Alternatively, the 77.55 & the 77.00 could hold the pair’s decline captive, breaking which 76.00 and the 75.20 might come forward as supports. Assuming the pair’s weakness below 75.20, the 74.40, the 72.40 and the 70.85 could become its next rests.

CAD/JPY

Unless breaking 82.40-55 resistance-zone, the CADJPY may fall short of aiming the 83.00, needless to mention about 50-day SMA level of 83.80 and the three-month long descending trend-line, at 84.00. Given the pair crosses 82.55 and the 84.00 barriers, the 200-day SMA level of 84.95 and the 85.20 might become Bulls’ favorites. On the downside, the 81.65 support-line break can fetch the quote to 81.00 and then to 80.60 prior to highlighting the 80.00 psychological magnet. Should prices slide beneath 80.00, the 79.60, the 78.50 and the 77.15 can appear in limelight.

Technical Checks For AUD/USD, EUR/AUD & AUD/JPY: 11.01.2019

AUD/USD

AUDUSD needs to close beyond 50-day & 100-day SMA confluence-region of 0.7195-80 in order to aim for 0.7240 and the 0.7300 resistances; however, the 0.7330-40 area, comprising 200-day SMA & nine-month old descending trend-line, can restrict the pair’s upside past-0.7300. In case prices continue rallying past-0.7340, the 0.7400, the 0.7440 & the 0.7485 may flash on Bulls’ radars to target. Meanwhile, failure to offer a D1 close above 0.7195 could drag the pair back to 0.7150 and then 0.7075 prior to challenging the 0.7015-10 support-zone. Assuming the pair’s sustained downturn under 0.7010, the 0.6970, the 0.6900 and the 0.6825 might act as intermediate halts during its plunge to 0.6730.

EUR/AUD

Failure to hold its uptick to 1.6690 seems fetching the EURAUD to 1.5885-80 horizontal-line, breaking which the 1.5820, the 1.5780 and the 1.5700 could gain market attention before highlighting the 1.5675-70 for sellers. Given the quote declines beneath 1.5670, the 1.5580 & 1.5510-1.5500 might become Bears’ favorites. Alternatively, the 1.6085 trend-line can limit the pair’s near-term upside but break of which can print 1.6200 on the chart. Moreover, pair’s successful rally above 1.6200 may avail the 1.6280, 1.6320 and the 1.6400 to please the buyers.

AUD/JPY

Short-term ascending trend-line is likely favoring the AUDJPY’s gradual recovery towards month-long resistance-line, at 78.65, which in-turn can open the gate for the pair’s rise to 79.30 & 80.00 round-figure. Though, 80.60-65 might confine the pair’s advances after 80.00, if not then 81.20 & 81.60 could be targeted if having long positions. On the contrary, break of 77.90 support-line may trigger the pair’s fresh dip to 77.00 and to 76.00. If at all trade sentiment remains in favor of pessimists below 76.00, the 75.20 & 74.00 seem crucial supports.

Was It a Computer-Driven Flash Crash Or Well-Designed Short?

Traders are saying that a technically-based “Flash Crash” drove the U.S. Dollar, the Australian Dollar and the New Zealand Dollar sharply lower against the Japanese Yen early Thursday. A torrent wave of automated selling against the Yen sent the Aussie plunging to multi-year lows. The greenback declined against the Yen to its lowest level since late March 2019. The Kiwi spiked lower, but losses were limited.

According to Reuters, the Australian Dollar suffered some of the largest intra-day losses in its history amid a “drought of liquidity and a cascade of computerized sales.”

The daily chart shows that a one point the Australian Dollar was down 5 percent against the Japanese Yen and almost 4 percent versus the U.S. Dollar, before clawing back much of the losses as trading conditions calmed and humans intervened to stabilize the markets.

According to Ray Attrill, head of FX strategy at National Australia Bank (NAB), “Violent moves in the AUD and JPY this morning bear all the hallmarks of a ‘flash crash’ similar to that which befell the NZD in August 2015 and GBP in October 2016.”

Attrill went on to say, “The fact that over half the move down in both these pairs has since been retraced is testimony to today’s moves being first and foremost a liquidity event.”

USD/JPY
Daily USD/JPY

Japanese Investors May Have Triggered the Moves

The daily USD/JPY chart supports the theory that Japanese investors who had been crowded into trades borrowing Japanese Yen to buy higher-yielding currencies, were forced out en masse when major chart levels were pierced. This chart shows former bottoms that failed this week at 109.770, 109.360 and 109.179. This left just one more level as support.

Flash Crash or Well-Played Short?

The major support according to the daily chart was the May 29, 2018 main bottom at 108.114. This chart showed that sellers had a clean shot at 104.600, which makes me wonder if it was actually a “flash crash” fueled by human or computer error, or a well-played strategy to break the Dollar/Yen. I tend to lean toward the side of a good trader or group of traders in this case. They saw opportunity and they seized it.

Touche’.

Technical Overview of Important JPY Pairs: 12.12.2018

USD/JPY

Although USDJPY’s U-turn from 100-day SMA & support-line of short-term symmetrical triangle helped it cross 50-day SMA, the triangle-resistance, at 114.00, could challenge the pair’s strength. Given the buyers’ ability to surpass 114.00 barrier on a daily closing basis, the 114.55 and the 115.00 might entertain them before pleasing with 61.8% FE level of 115.30. On the contrary, 50-day SMA level of 113.00 and the 112.55 can offer immediate supports to the pair ahead of highlighting 112.35-30 support-confluence for one more time. If at all prices slid beneath 112.30, the 111.60, the 111.00 and the 110.65, comprising 200-day SMA, may flash on Bears’ radars to target.

EUR/JPY

EURJPY struggles between four-month old ascending trend-line and 50-day SMA, namely the 127.70 and the 128.90 levels, with 129.30 & 126.60 being follow-on numbers to watch in case of either side breaks. Let’s say comparative strength of JPY drag the pair beneath 126.60, then the 125.55, the 125.00 and the 124.60 may become sellers’ favorites. Alternatively, the 129.70-75 resistance-zone, including 200-day SMA & nearby downward slanting TL, can try limiting the pair’s rise past-129.30, failing to which may propel it to 130.00 and the 130.50 resistance-levels.

AUD/JPY

Having reversed from 50-day & 100-day SMA joint, the AUDJPY seems heading north to 82.50 & 83.00 but 83.90 and the 84.45-55 horizontal-area could confine the pair’s additional upside. Should Bulls refrain to respect the 84.55 hurdle, the 85.60 and the 86.00 may mark their presence on the chart. Meanwhile, D1 close below 81.20 SMA intersection can quickly fetch the quote to 80.40 and the 80.00 consecutive rest-points. During the pair’s extended south-run after 80.00, the 79.45, the 79.00 and the 78.55 might gain traders’ attention.

CHF/JPY

While 114.60 triggered the CHFJPY’s pullback, counter-trend traders may only have 113.50 to be happy with as adjacent support-line, at 112.95, and the 112.30-25 region, including 200-day SMA & seven-month long ascending trend-line, can trouble them afterwards. Given the pair drops below 112.25, the 111.70 and the 111.25 could play their roles of supports. In case prices surge beyond 114.60, the 114.90 and the 115.10-15 are likely levels to limit the pair’s advances, breaking which 115.60-65 may be targeted if holding long positions. Moreover, pair’s successful rise above 115.65 can escalate the rally to 116.00 and then to the 116.50 resistances.

Important JPY Pairs’ Technical Overview: 28.11.2018

USD/JPY

Following its pullback from 112.30, the USDJPY is again preparing to conquer 114.05-10 horizontal-resistance; however, a closing break above the same is required for the pair to aim for 114.55 & 114.75 numbers to north. In case prices manage to provide a D1 close beyond 114.75, the 61.8% FE level of 115.35 and the 115.50 could entertain buyers prior to pleasing them with 116.00 round-figure. On the downside, 112.90 & 112.50 may limit the pair’s near-term declines before highlighting the 112.30, the 100-day SMA level of 112.15 and an upward slanting trend-line, at 112.00, as supports. Assuming the pair’s dip beneath 112.00, the 111.30 & 110.70 might offer intermediate halts during its plunge to 110.35, comprising 200-day SMA.

EUR/JPY

EURJPY is also struggling with immediate resistance-line and can drop to 127.75 but an ascending TL, at 127.25, could challenge sellers then after. Given the pair’s refrain to respect 127.25, the 126.65-60 support-zone may gain market attention as break of which might not hesitate fetching the quote to the 126.00, the 124.95 and the 124.60 consecutive rest-points. Should the pair surpasses 128.75 adjacent barrier, it can quickly rise to 129.10 & 200-day SMA level of 129.85. Moreover, pair’s successful north-run above 129.85 could take a break near 130.00 ahead of targeting 130.55 & 131.40 resistances.

AUD/JPY

With three week long descending trend-line still being unbroken, chances of the AUDJPY’s dip to 81.85 and then to 81.65 support-line can’t be denied. If at all the pair keep trading southwards past-81.65, the 81.20, the 81.00 and the 80.40-35 may question the Bears whereas break of 80.35 could flash 80.00 & 79.75 on the their radars. Meanwhile, an upside clearance of 82.55 resistance-line can escalate the pair’s recovery to 82.80 & 83.05. Though, pair’s advances beyond 83.05 may push Bulls to opt for 61.8% FE level of 83.65 as landmarks.

CHF/JPY

Even after crossing 50-day SMA, the CHFJPY is yet to break the 113.90-95 resistance-region in order to claim the 114.20 & the 114.70 levels. In case the pair maintains strength above 114.70, the 115.05-10 can try confining its rally, if not then 115.60 & 116.00 may mark their presence on the chart. Alternatively, 113.40 & 113.00 seem immediate supports for the pair, breaking which 112.50 and an ascending support-line, at 111.90, should be observed closely. Given the pair’s sustained downturn below 111.90, the 111.50 & 110.90 may become pessimists’ favorites.

AUDUSD tests the broken neckline

One of the best looking setups among major pairs can be seen on the AUDUSD, where we do have a beautiful reversal pattern and according to the price action rules, we should soon see the further rise. We are talking here about the setup on the daily chart, which only adds the credibility (setups on daily weekly charts are always the most powerful).

AUD/USD Daily Chart
AUD/USD Daily Chart

Since the beginning of September, the AUDUSD was creating the Inverse Head and Shoulders, so a strong bullish reversal formation. In our case, everything went according to the plan and on Friday, buyers managed to break the neckline (grey) of this structure. In the same time, that resistance was the 23,6% Fibonacci of the main yearly downtrend. The new week starts with a small pull-back, which is rather typical for this kind of a price action. Simply – broken resistance is being tested as a support.

Price closing a day above the grey area will be a strong signal to buy. On the other hand, price coming back deep below the neckline will mean a false breakout and can crash the bullish dreams for a long time. There is one rule with trading the false breakouts – you do not mess with them.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

Technical Update For AUD/USD, EUR/AUD, AUD/JPY & AUD/CHF: 01.11.2018

AUD/USD

Early-month risk-on moves recently helped the AUD to recover some of its latest losses and AUDUSD is no exception to this as it crossed 0.7145-40 region; however, the pair needs to sustain the breakout in order to aim for 0.7200 and the 0.7235-40 resistance-area. Given the quote continue rising past-0.7240, the 0.7260 & 0.7300 are likely following numbers to appear on the Bulls’ radar to target. If at all prices fail to hold their strength and slide beneath 0.7140, the 0.7120 & 0.7100 can come-back on the chart. Assuming the pair’s extended downturn below 0.7100, the 0.7055 and the 0.7040 may be considered as strong supports, breaking which 0.7020 & 0.7000 could gain market attention.

EUR/AUD

Alike AUDUSD, the EURAUD also portrayed the Aussie’s strength by dipping below five-month old ascending trend-line, which if maintained on a daily closing basis, can drag the pair to 200-day SMA level of 1.5845. Should the pair refrains to respect the 1.5845 rest-point, the 1.5800 and the 1.5720 might try threatening sellers, failing to do so could open the gate for 1.5650 and 1.5600 levels. Meanwhile, the 1.5950 and the 1.5975-85 seem restricting the pair’s near-term advances ahead of highlighting the 1.6000 and the 1.6030 resistances. During the pair’s successful rise beyond 1.6030, the 1.6120 and the 1.6145-50 confluence, including 50-day SMA & immediate descending TL, might trouble the Bulls.

AUD/JPY

AUDJPY’s clearance of 80.60 pushes the pair towards 81.00 round-figure but the 81.25-30 may disappoint buyers afterwards, if not then 81.65 & 82.00 could be their next bets. In case the quote rules above 82.00 landmark, the 82.25 & 82.50 are expected levels to watch. Alternatively, 80.60 & 80.40-35 may offer nearby supports to the pair during its pullback whereas an upward slanting TL, at 80.00, can confine further declines. Though, the support-line’s inability to tackle Bears may flash 79.00 & 78.50 on their radars to target.

AUD/CHF

Not only a D1 close beyond descending resistance-line stretched since June, but an apt closing above 100-day SMA level is also required for the AUDCHF to go ahead with its recent recovery otherwise its drop to 0.7140 & 0.7120 can’t be denied. Given the pair’s continued downside beneath 0.7120, the 0.7100 and an ascending support-line, at 0.7035, might be of concern as break of them can fetch the pair to 0.6965 & 0.6900 supports. On the upside, a daily close above 0.7165 & 0.7185 respective barriers can escalate the prices to 0.7215 and then to 0.7260-75 resistance-zone. Moreover, pair’s successful trading above 0.7275 enables it to challenge the 200-day SMA level of 0.7305 and the 0.7320 resistance-levels.

How to Trade the AUD in the Upcoming Days?

Since the beginning of 2018, the Australian dollar has depreciated by 6-8% against major counterparts. The currency keeps depreciating and traders are more and more curious about the future tendency.

The analysis of the Commodity Futures Trading Commission (CFTC) displays the net short positioning of the AUD. And it’s clear that shorts of the AUD prevail.

AUD/USD

What factors pull the AUD down?

The first and the major reason of the AUD weakness is trade wars. First of all, the Australian dollar is considered as the risky currency. Traders will never invest in such currencies in times of uncertainties. Secondly, the trade war affects the Chinese economy. China is the main trade partner of Australia. Problems in the Chinese economy will affect the trade relations between these two countries.

Furthermore, a risk-off sentiment that pulls the Asian stock market down affects the currency a lot. Any volatility on the stock market is reflected in the depreciation of the currency.

The second reason is the policy of the Reserve Bank of Australia. According to the central bank, the declining Aussie helps improve economic growth, hiring, and wages. Therefore, the rate hike is planned not earlier than in 2019.

The third reason is economic data that are highly volatile and differ from time to time. For example, the last jobs data that were released on October 18 were mixed, as a result, the AUD fell.

What can change the Australian downtrend?

It’s early to talk about the strengthening of the AUD because up to now, there are no crucial fundamental factors that may become drivers for the Australian currency.

If only the USD plunges significantly, the AUD will get a chance to turn the situation in its favor. Moreover, an improvement in the trade disputes may boost the Australian currency.  However, there are no clues that these factors will occur soon.

Let’s have a look at the short-term trading

AUD/USD

Although the pair keeps trading within the downward channel, it doesn’t mean that the AUD won’t have a chance to rise within the channel.

Events to take into consideration:

AUD:

Oct. 31: CPI, Trimmed Mean CPI

USD:

Oct. 30: CB Consumer Confidence

Moreover, a relief in political and trade issues may improve the investors’ sentiment.

Up to now, the pair has been moving down, however, it still has a long way to the next support. If the pair gains a foothold below 0.7041, it will provoke a further fall to 0.6938. Technical indicators don’t signal an upward move, however, as soon as RSI is below 30 level and the parabolic SAR forms 3 dots above the price, the pair will get a chance to turn around. In the case of positive economic figures and market sentiment, this chance will appear sooner. The important resistance is at 0.7150. The next resistance will lie at 0.7220.

AUD/USD Daily Chart
AUD/USD Daily Chart

Making a conclusion, we can say that the AUD/USD pair is anticipated to trade within the downward channel, as there are no boosters to break this negative trend for the AUD. However, even within the channel, the pair may move up in case of positive economic data and the development in the market risk sentiment.

USDJPY aims for the monthly highs

The new week starts for us with the analysis of the USDJPY, where we do have a nice bullish setup. That is something new in October as the 10th month of the year is so far negative for this instrument and up to date, is bringing us a strong decline.

It seems that bad times are over though. First of all, in the previous week, price bounced from the long-term up trendline (green). In addition to that, USDJPY drew a bullish price formation – Inverse Head and Shoulders pattern (yellow). That formation is already active and actually, was activated today, when the price broke the neckline (upper black). Price closing a day above that life will be a confirmation of a positive sentiment on this instrument.

USD/JPY 4H Chart
USD/JPY 4H Chart

As for the target, well… first we should break the resistance on the 50% Fibonacci and later we should aim for the highs from the beginning of October. Chances that we will get there are quite high.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis

Important JPY Pairs’ Technical Checks: 05.10.2018

USD/JPY

With the 114.50-75 horizontal-region and overbought RSI restricting the USDJPY's further upside, chances of the pair's pullback to 113.35 and then to the 112.60 are quite high. However, the 112.15-10 and the 111.30-15 support-confluence, comprising 100-day SMA & upward slanting TL, could challenge the quote's declines past-113.35. In case prices refrain to respect the 111.15 mark, the 200-day SMA level of 109.80 may gain Bears' attention. On the upside, a D1 close beyond 114.75 can quickly flash 115.00 on the chart, breaking which 115.50 & 116.10 could become crucial to watch. Assuming the pair's sustained rise above 116.10, the 117.00, the 117.80 & the 118.70 might appear on the Bulls' radar to target. AUD/JPY

With the 114.50-75 horizontal-region and overbought RSI restricting the USDJPY’s further upside, chances of the pair’s pullback to 113.35 and then to the 112.60 are quite high. However, the 112.15-10 and the 111.30-15 support-confluence, comprising 100-day SMA & upward slanting TL, could challenge the quote’s declines past-113.35. In case prices refrain to respect the 111.15 mark, the 200-day SMA level of 109.80 may gain Bears’ attention. On the upside, a D1 close beyond 114.75 can quickly flash 115.00 on the chart, breaking which 115.50 & 116.10 could become crucial to watch. Assuming the pair’s sustained rise above 116.10, the 117.00, the 117.80 & the 118.70 might appear on the Bulls’ radar to target.

AUD/JPY

Not only break of 81.35-30 support-zone but short-term descending trend-line also portrays the AUDJPY’s weakness, which in-turn highlights the importance of the 80.25 support-level prior to pushing sellers to aim for the 79.95-90 rest-area. Given the pair continue trading southwards below 79.90, the 79.50 and the 78.65 can become market favorites. Meanwhile, adjacent resistance-line figure of 80.65 can limit immediate advances of the pair, breaking which 81.00 & 81.30-35 may entertain buyers. In case the pair surpasses 81.35 barrier, it’s rally to 81.75 & 82.00 could be expected.

CHF/JPY

Ever since the CHFJPY dipped below month-old ascending trend-line, it never stopped declining and signals the test of 50-day SMA level, around 114.00 now. Should 114.00 fails to trigger the pair’s U-turn, the 113.50 and the 113.25-15 rest-region can try their lucks to confine following downturn, if not then 200-day SMA level of 112.80 seems critical support to observe. Alternatively, the 115.00, the 115.60 and the 116.70 could please the counter-trend traders before emphasizing on 117.20. Also, pair’s successful break of 117.20 can shift limelight to 118.00 and the  118.55 north-side numbers.

Exotic vs Major & Minor Currencies

While the currency pairs we hear about most often are the major and minor pairs, there are actually far more exotic currency pairs to trade. In this introduction, we will define the types of currency pairs and cover some of the basics you’ll need to know before you begin trading the ‘exotics’.

Major and Minor Currency Pairs

Firstly, we should define major and minor currency pairs. The following are regarded as major currencies:

  • US Dollar (USD)
  • Euro (EUR)
  • Japanese Yen (JPY)
  • British Pound (GBP)
  • Swiss Franc (CHF)
  • Canadian Dollar (CAD)
  • Australian Dollar (AUD)
  • New Zealand Dollar (NZD)

Major currency pairs refer to any pair containing one of these currencies and the US Dollar, so while there are eight major currencies, there are only seven major currency

An important issue in the currency market is liquidity – i.e. the amount of any currency being bought or sold at any time. The most liquid currency pairs tend to have natural supply and demand from exporters and importers in addition to the supply and demand generated by speculators and investors. Since all the countries listed above have substantial trading relationships with the US, constant liquidity is provided by exporters and importers.

Minor currency pairs include any two of the major currencies apart from the USD. Some of these pairs, including GBP/EUR and AUD/JPY represent pairs of countries with active

trade relationships, providing significant liquidity. Others, like CHF/JPY and EUR/JPY, have less active natural supply and demand.

Currency Liquidity

Before we move on to exotic currencies it’s important to understand that there are two major forces driving the exchange rate between two currencies; natural supply and demand, and the relationship between those two currencies and other currencies – most notably the USD. If you exchange GBP for EUR, importers, and exporters in both the UK and Europe will be buying and selling both currencies, providing an active market. On the other hand, if you exchange GBP for NZD, there will be fewer importers, and exporters active in the market – the quotes will more likely be a combination of the GBPUSD rate and the USDNZD rate. With currencies that are even less liquid, exchanging one currency for another will inevitably involve exchanging the first currency for USD and then exchanging USD for the second currency.

Most forex brokers offer clients forex trading either in the direct currency market or via CFDs (contracts for difference). Either way, the spreads they offer depend on the liquidity of the underlying currency market. Even though you may see a pair quoted as just two currencies, for the trades to take place in the underlying market, at some point an extra leg may have to be executed by a market maker.

What are exotic currencies?

Exotic currencies are any currencies not mentioned already. Some like the Hong Kong Dollar (HKD) and Norwegian Krone (NOK) are actually very liquid, some like the Mexican Peso (MXN) and Thai Baht (THB) are fairly liquid, and others like the Malawian Kwacha (MWK) and Laos Kip (LAK) have very little liquidity.

Exotic pairs are those that include one major currency and one exotic currency. While there are over 150 countries that could be classified as developing nations, trading in exotic currencies is focussed on 18 currencies. Admiral Markets UK Ltd, a prominent forex and CFD broker, for instance, lists 19 exotic FX currency pairs including 10 exotic currencies. There are plenty of other exotic currencies, but in most cases, brokers will only offer those that their clients demand.

The following are the most widely traded exotic currencies:

  • Norwegian Krone
  • Polish Zloty
  • Czech Koruna
  • Hungarian Forint
  • Russian Ruble
  • Turkish Lira
  • Chinese Yuan Renminbi
  • Singaporean Dollar
  • Hong Kong Dollar
  • South Korean Won
  • Thai Baht
  • Malay Ringgit
  • Indonesian Rupiah
  • Indian Rupee
  • Mexican Peso
  • Brazilian Real
  • South African Rand

With any broker, the spreads being offered for a currency pair will reflect the underlying liquidity for that pair. Admiral Markets, for instance, offers spreads as low as 0.1 pip for the EURUSD pair (the most liquid pair in the world) to 5 pips for CADCHF and 10 pips for the USDCNH. For even less liquid currencies, the spreads can be much wider, in some cases reaching 800 pips.

Which Currencies Should You Trade Exotic Currencies Against?

An exotic currency will usually have better liquidity if it is traded against the currency of a major trading partner. The Turkish Lira is therefore usually traded against the Euro, the HKD against the USD or Chinese Renminbi and Mexican Peso against the US Dollar. You would struggle to find a broker offering a Malawian Kwacha/Swiss Franc pair, but even if you did, the spreads would be very wide. In most cases, exotic currencies from countries in or close to Europe are traded against the Euro, and others are traded against the USD.

Pros and Cons of trading Exotic Currencies

The currencies of developing nations are often volatile and prone to trend strongly. Some countries with large current account deficits have structurally weak currencies that have weekend consistently for decades, while others have steadily strengthened over time.

This means there are certainly opportunities for forex traders to profit. The downside is that trading costs can be high and are some currencies are prone to large, unexpected moves when government policies are changed without warning.

For the most part, traders need to have a longer-term view when trading exotic currencies than they would with major currencies. The less liquid a currency is, the longer the time horizon should be. Some, like the Norwegian Krone and Singapore Dollar, are very liquid and can be treated like major currencies. However, others, like the South African Rand and Turkish Lira are not suitable for intraday trading and are only suitable for medium-term trading under unique circumstances. In most cases, exotic currencies require time horizons of weeks to months, unless a very unique opportunity presents itself.

Secondly, traders must familiarise themselves with the typical patterns for a particular currency before trading it. Each currency has its own unique personality and there are usually good and bad times of the day and week to trade them.

Conclusion

While trading exotic currencies are less straightforward than trading major and minor pairs, they do offer very profitable opportunities. Every few years there is usually an emerging market currency crisis which results in some currencies moving as much as 20 to 30%.

These situations offer forex traders opportunities they will seldom see in major pairs. It is therefore worth learning more about these currencies and adding another tool to your trading arsenal.

Risk disclosure: Forex and CFD trading carries a high level of risk that is not suitable for all investors. Presented information is not an offer, recommendation or solicitation to buy or sell. Before making any investment decisions, you should seek advice from an independent financial advisor to ensure you understand the risks involved. Read more at admiralmarkets.com.

Technical Outlook For AUD/USD, AUD/JPY & AUD/NZD: 14.09.2018

AUD/USD

AUDUSD’s recovery from 0.7080 region may find it hard to prevail for long as not only 0.7235-40 horizontal-area but the descending TL figure of 0.7265 could also challenge the Aussie buyers. If the pair manage to surpass 0.7265 trend-line barrier, the 0.7320 and the 0.7355 can come back on the chart whereas 0.7370 and the 0.7410 might please the Bulls afterwards. Alternatively, the 0.7165 and the 0.7130 can offer immediate supports to the pair during its pullback before highlighting the 0.7080 mark for sellers. In case the quote continue declining past-0.7080, the 61.8% FE level of 0.7040 and the 0.7000 round-figure could gain market attention.

AUD/JPY

With the two-month old downward slanting TL restricting AUDJPY’s upside, chances of the pair’s drop to 79.70-65 and then to the 79.25 seem brighter. However, recent low around 78.65 and the 61.8% FE level of 77.95 may try disappointing the sellers, if not then 77.40 can become Bears’ favorite. Meanwhile, D1 close beyond 80.75 trend-line can escalate the pair’s rise to 50-day SMA level of 81.55 and then to the 82.00 comprising 200-day SMA. Given the price rally above 82.00, the 82.80 and the 83.65-70 should be watched carefully.

AUD/NZD

Having reversed from five-week old descending trend-line, the AUDNZD may revisit the 1.0900 and the 1.0880 supports while 1.0860 can limit the pair’s further downside. Should the quote drops below 1.0860, the 1.0840 and the 61.8% FE level of 1.0820 may prove as strong rest-points. On the upside, aforementioned TL at 1.0955, followed by another trend-line figure of 1.0985, can restrict the pair’s nearby advances, breaking which 1.1020 and 1.1060 seem crucial to watch. Assuming that the quote continue rising post-1.1060, the 1.1100 and the 1.1130 can be targeted if holding long positions.