AUDJPY Reaching Bullish Target – Technical Analysis
AUDJPY Reaching Bullish Target
Is AUDJPY reaching bullish target? We entered a bullish position back on October 4 based on Invest Diva's IDDA approach to strategy development. Today let's dig in and see where our Invest Divas stand on this trade and what to expect next.
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Technical Analysis | AUDJPY Reaching Bullish Target
After reporting on the AUDJPY pair as it tested above the Ichimoku cloud end of last month, we published our bullish entry signal with our premium students beginning of October.
The AUD/JPY pair has almost completed a Triple bottom chart pattern on the daily chart after better than expected CPI release on Wednesday. With the pair already above the Ichimoku cloud and with the future cloud sliding up a bit, our bullish target is set at 81 for now.
Long Term Analysis: On the monthly chart, the pair has clearly formed a bullish Engulfing in October after two consecutive months of indecisiveness at the very important support of 76.40.
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With only three trading days remaing in October, chances are we could see the Bullish engulfing hold, signaling a reversal.
Fundamentals | AUDJPY Reaching Bullish Target
Aussie Side: Data from our mates in the Land Down Under showed consumer prices inching higher in the third quarter of 2016 after the Reserve Bank of Australia (RBA) eased its policies.
The CPI came in at 0.7%, much better than the 0.5% expected and the 0.4% increase in Q2 2016.
A closer look tells us that the most significant price rises over the quarter came from fruit , vegetables, electricity and tobacco. This was offset by declines in transport and communication costs.
Overall the report was good stuff. So Aussie traders around the world at least temporarily stopped worrying about another RBA rate cut. This ultimately led to Mr. Aussie dancing upward against his major forex dancing partners.
Japan Side: We have upcoming economic data from the land of the rising sun!!
During Friday's Asian session Japan will release their Consumer Price Index at 11:30 PM GMT and the result could have a minor impact on the AUD/JPY pair.
More on the Economic calendar...
Thursday: The UK is scheduled to release their Gross Domestic Product during the London session today at 8:30 AM GMT and later during the New York session we have the US Durable Goods Orders (SEP P) at 12:30 PM.
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Market Sentiment | AUDJPY Reaching Bullish Target
Ms. Japanese Yen has been getting weaker against her major forex dancing partners including Mr. USA and Mr. Aussie. Meanwhile at Sydney's market open on Thursday 52% of traders were short Mr. Aussie. Using this as a contrarian indicator, this gives us further bullish bias, although not too strongly.
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So we don't quite have the market sentiment behind our bearish scenario. At least for now.
Trading Strategy | AUDJPY Reaching Bullish Target
Let's take an IDDA approach for the AUD/JPY traders.
Short-MediumTerm: If you are already in a bullish position, depending on your risk tolerance, you could set your short-term bearish target at either 80 or 81.
Bearish Scenario: The pivot level is at 78.55. The medium-term support is set at 76.40. At this point only a break below the Ichimoku cloud would change our outlook to bearish.
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Here are Invest Diva's calculations for important AUJPY approximate levels to keep an eye on:
|Support Levels||Turning Point||Resistance Levels|