The Australian dollar has rallied against the Japanese yen for six consecutive days. Yesterday, the Australian currency rallied off a mixed employment report. The headline number of 26K, showed job growth was stronger and the unemployment rate declined a point to 5.7%. The data was mixed because the overall employment gains stemmed from part-time jobs. Full time employment lost 8.8K positions.
Price action on the AUD/JPY daily chart shows that critical support remains the $80.00 handle. The recent rally has recaptured the 50-day SMA and is tentatively respecting the 100-day SMA. If the bullish move continues, key resistance will come from the 200-day SMA, which currently trades around the 86.14 level. Further longer-term upside may target 90.00 handle. It is around that area that price could form a bearish butterfly pattern. Point D is targeted with both 141.4% Fibonacci expansion level of the X to A leg and the 161.8% Fibonacci expansion level of the B to C move.
If the current bullish move stalls, price may target the $82.00 region. Deeper support may come from the noted $80 level.
We may see another leg higher in Asia if we do not see weaker than expected GDP and Industrial data from China. Market consensus is eyeing Q1 GDP at 1.5%. The March reading for Chinese Industrial Production is expected to a one-tenth of a percentage point to 5.5%.
The trade: buy AUD/JPY at 82.50, with a stop loss at 81.50 and take profit at 85.50. The risk/reward ratio is 1:3