29 Aug 2013
AUD/JPY heavy buying through 87.50, double bottom?
FXstreet.com (Barcelona) - AUD/JPY has broken above the short term consolidation pattern at 87.50, leading to stops being tripped and price rallying into 87.65 offers, as the Nikkei is off to a good +0.5% start.
Early on Wednesday, with risk-off sentiment receding and the AUD/USD finding buyers sub-0.89, the AUD/JPY managed to break above the 20-hourly EMA - dynamic resistance - to then be temporarily capped by 87.50, now history as emerging buyers take advantage of a second leg higher, one that usually comes with strong momentum as sellers get taken on the wrong foot.
On the way up, the next key target for buyers is the 88.00 round number, which converges with the bottom of a broken trendline from earlier on the week. On the downside, 87.50 looks set to provide significant support after a legitimate range breakout. The break above 87.50, with an hourly candle ideally printed above, should confirm potential for double bottom above 86.40, which coincides with the 61.8% fibonacci retracement from the 2012/13 rally.
The next key risk event for trades of the AUD/JPY will be the capex release in Australia at 1.30GMT.
Early on Wednesday, with risk-off sentiment receding and the AUD/USD finding buyers sub-0.89, the AUD/JPY managed to break above the 20-hourly EMA - dynamic resistance - to then be temporarily capped by 87.50, now history as emerging buyers take advantage of a second leg higher, one that usually comes with strong momentum as sellers get taken on the wrong foot.
On the way up, the next key target for buyers is the 88.00 round number, which converges with the bottom of a broken trendline from earlier on the week. On the downside, 87.50 looks set to provide significant support after a legitimate range breakout. The break above 87.50, with an hourly candle ideally printed above, should confirm potential for double bottom above 86.40, which coincides with the 61.8% fibonacci retracement from the 2012/13 rally.
The next key risk event for trades of the AUD/JPY will be the capex release in Australia at 1.30GMT.