The pair AUD/JPY has been in the uptrend since the beginning of April. Up to date, the price has grown for over 700 points (from 90.70 to 97.28). Today, at the opening of the Asian session the pair continued to rise. Given the latest economic news, tendency in the currency movement and technical analysis of the chart we can assume that the pair will continue to grow and will undergo corrections on the hourly and four-hour charts. At the same time the pair is likely to stay in the range of 117.00 – 122.00 (wide channel) and 118.50 – 121.00 (narrow channel).
The rise in the pair AUD/JPY in the near future will be caused by the following factors:
- The rise in the pair AUD/USD amid weakening in the USD and due to the decision of the Reserve bank of Australia not to lower interest rates. A draft of the new budget of Australia with the reduced deficit will also contribute to the rise in the pair.
- Difference in the interest rates of Japan and Australia. The rise in the pair AUD/JPY makes possible to use the strategy carry-trade, based on the difference in the interest rates of the state banks.
- Probability of the further monetary policy easing by the Bank of Japan.
Support and resistance
Looking at the weekly chart of the pair AUD/JPY we can trace clear uptrend. The price is above the moving average lines of ЕМА144 and ЕМА200. At the beginning of April the price rebounded from the strong support level of 91.00 (ЕМА200). If we consider this level as the completion of the correction towards the upward, the pair confirms the uptrend testing Fibonacci retracement of 50.0%. The indicators also confirm uptrend. OsMA histogram is above the zero line and is rising. Stochastic has turned upwards; trend indicator is of the green color.
On the four-hour chart, the pair is in the uptrend. Nevertheless it makes sense to wait when the indicators OsMA and Stochastic give buy signals, which will be indicated by the increasing volumes and upward lines of the indicators. Pending orders BUY-Limit can be placed at the levels of 95.10, 95.50, 95.80 and 96.25 with the targets of 97.25, 97.75, 98.20 and 98.45.
Support levels: 95.80, 95.50, 95.10, 94.60, 94.25, 93.40 and 93.00
Resistance levels: 97.20, 97.75, 98.20 and 98.45
It is advisable to open buy positions with the targets of 97.25, 97.75, 98.20 and 98.45. However, it is better to open long positions if the price rebounds to the levels of 95.10, 95.50, 95.80 and 96.25. Sell positions can be opened if the price breaks down and consolidates below the level of 93.40, which coincides with Fibonacci retracement of 23.6%.