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Today’s Trading Edge: AUD/JPY rallies toward 100-day SMA

Posted by WorldWideMarkets . on Apr 14, 2016 9:30:01 PM


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

Topics: $AUS, AUDJPY, Australia Economy, China Data


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