AUD/JPY: Trend Line Break Near?
Titan FX | Apr 14, 2015 01:08AM ET
Key Highlights
· Aussie dollar fell sharply against the Japanese yen, as the latter one gained a lot of buyers recently.
· Australian National Australia Bank Business Confidence released today came in at 3 in March 2015, up from the last reading of 0.
· AUD/JPY has a major support around 91.00-90.80, which if breached could open the doors for more downsides.
Technical Analysis
The Aussie dollar weakened a lot recently not only against the US dollar, but also against the Japanese yen. There were a couple of reasons for the AUD/JPY pair moving lower. First, the recent economic releases in China were softer than expected and weighed on the Aussie dollar. Second, the Japanese yen gained ground against most major currencies latterly.
The AUD/JPY pair fell sharply, but found support around an important support trend line formed on the 4-hour chart. The Aussie dollar sellers made 3-4 attempts to break the highlighted trend line, but failed. This increases the chance of a short-term correction if the Japanese ten retreats. Currently, the pair is struggling to clear the 23.6% fib retracement level of the last drop from the 93.04 high to 90.86 low. AUD/JPY is also sitting below the 100 and 200 simple moving averages (SMA) – 4H, which is a negative sign.
If the AUD/JPY pair fails to move higher and moves lower, then a break of the highlighted trend line could ignite sharp losses in the near term.
Moving ahead
Today, the US retail sales report pointing the total receipts of retail stores will be released by the US Census Bureau, which is expected to gain by 1.1% rise in March 2015.
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