November 24, 2022
  • November 24, 2022

AUD Technical Outlook: AUD / USD, AUD / JPY Rolling Over

By on June 17, 2021 0

Technical outlook in AUD

  • AUD / USD reverses, broke support yesterday
  • AUD / JPY Approaches Breaking Rising Wedge

AUD Technical Outlook: AUD / USD, AUD / JPY Rolling Over

The first week of the month AUD / USD broke many supports tested around 7700 only for it to turn out to be a false breakout the very next day. A symptom of low volatility. Yesterday, on a surprising twist by the Fed to adjust rate hike expectations, the level was again broken along with the counterfeit day low.

Today we are seeing some follow-up and with that the 200 day MA is about to come into play at 7548 with the April low at 7531. Considering how the AUD s ‘has been behaving in recent months, stalled and showing signs of an Above, testing and breaking these levels can only be a formality.

We will want to pay attention to the quality of the price action as new supports emerge. If we only see a minor reaction or no reaction, it will confirm the idea that a wider top has been put in place and a wider downward movement may have only started.

Keep an eye on the stock markets as they are at a standstill, and a massive sell-off of stocks will indicate broader risk aversion which will almost certainly have an additional impact on the direction of the AUD against the USD and the USD. JPY.

AUD / USD daily chart

AUD / USD chart by TradingView

AUD / JPY has formed a range of shrinkage over the past few months and looks set to be resolved. It wasn’t too long ago that the ascending wedge looked set to break higher in line with the larger trend, but with price action today we might indeed see a confirmed breakout.

Considering the length and size of the model, this could lead to a significant decline. First as minor support just around the 83 line, followed by more significant support at the bottom of the wedge, below 82. If things got aggressive on the risk front, we could see a drop to the upside of the 200 days, currently 80.31.

There is still plenty of time in today’s session so it will be important for AUD / JPY to hold the breakout until the close. A close below 83.93, the lowest point in recent weeks, should do the trick to confirm the breakout.

AUD / JPY daily chart

aud / jpy

AUD / JPY chart by TradingView

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— Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

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