AUDJPY: Downside Pressure to Intensify Below 85.40

by Justin Bennett  · 

February 9, 2018

by Justin Bennett  · 

February 9, 2018

by Justin Bennett  · 

February 9, 2018

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Over the weekend I discussed how a close below the 87.20 support level on the AUDJPY would intensify the selling pressure that’s been building since late January.

However, I was more interested in a break below the confluence of support at 85.40.

Here’s what I wrote:

From a technical perspective, 87.20 is significant, but the confluence of support at 85.40 holds the key to much lower levels in my opinion. If we see the pair test 85.40 and buyers fail to hold prices above it, a 400 pip slide toward 81.50 may be in the cards.

Thursday’s risk-off move sent the pair well below the confluence of support at 85.40. As such, I was anticipating an influx of selling pressure on any retest of the area as new resistance.

At the moment the AUDJPY is trading at 85.07 with a session high of 84.45. It’s no coincidence that the pair sold off following a print of just five pips above 85.40.

Like other yen crosses, the AUDJPY is a bit overextended. The daily mean as measured by the 10 and 20 EMAs is about 160 pips above the current price. With this in mind, we could see some consolidation today and perhaps early next week.

That said, as I mentioned in the recent EURJPY commentary, the behavior of global risk assets would suggest that we’ve entered or are at least on the brink of a risk-off environment. If true, we could see the yen crosses remain below their daily mean for quite some time.

I won’t try to guess whether the pair will consolidate further or drop lower in today’s session. What I will say or rather reiterate as I pointed this out on Sunday is that Thursday’s close exposes much lower levels including the 81.50 area.

Alternatively, a daily close (New York 5 pm EST) back above 85.40 would negate the bearish outlook and re-expose 87.20.

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  1. Would you think that Silver will reach the 15.60-15.92 level of support in the coming weeks? Would you be able to give us your analysis on Silver this coming week please? Thanks Justin

  2. Hello Justin, when you said, “The daily mean as measured by the 10 and 20 EMAs is about 160 pips above the current price.” How did you come up with 160 pips? And how did you assume consolidation may come base on that pip value?

  3. Hi Justin

    I want to try to understand your analysis. Am I correct that on this AUD/JPY you want to wait to a daily close below 85.40 New York , today 8/2 it close 84.60.

    So would you then take the trade as sell after the close or wait for the right opportunity? When market opens again?

    Would the stop loss be the last resistance 87.20 and TP 83.80 or 81.50

    Thanks , keep up good work

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