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AUDJPY: Keep an Eye on 87.20

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Since carving a floor at 72.45 in June 2016, the AUDJPY is up more than 1,500 pips. From trough to peak, it’s a gain of nearly 1,800 pips.

I use the term “peak” loosely as there’s no sign that the September 2017 high at 90.30 will hold as an intermediate (one year or longer) high.

However, if the other yen crosses we’ve discussed recently capitulate, the AUDJPY will follow. In other words, a strong yen will begin to drag the AUDJPY lower.

Right now the pair is a bit of a holdout in the sense that it hasn’t succumbed to selling pressure like that of the EURJPY. Even the AUDJPY’s counterpart, the NZDJPY, has started to break lower.

So will the AUDJPY be next?

I think it will. But from a technical standpoint, the pair hasn’t given us a reason to go short just yet. It’s likely going to take a daily close (New York 5 pm EST) below the 87.20 handle to trigger further weakness here.

That would pave the way for a move toward the 85.40 area. It would also help solidify the idea that the 2017 high at 90.30 is a significant one.

Key resistance at the moment comes in just above the 89.00 handle. A daily close above that would expose 90.30.

As for events to keep an eye on, Australia reports CPI on January 30 at 7:30 pm EST. Later that evening, President Trump gives his “The State of the Union Address” at 9 pm EST.

The speech isn’t usually a big market mover, but “usual” isn’t in Present Trump’s vocabulary, so anything is possible.

Then on Wednesday, January 31 we have a Fed rate decision and statement at 2 pm EST. The week concludes with non-farm payroll on Friday at 8:30 am EST.

There are a few other potential market movers this week, but those are the significant ones.

As you can see, it’s a jam-packed week. I’ll be keeping a close eye on what effects these events have on the Japanese yen in particular, which is where I believe the real opportunity lies.

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AUDJPY range on the daily time frame

Leave a Comment:

15 comments
Martins says

Hello bro, I have noticed u only draw ur support and resistance at those levels where price reversed complete and not those areas that halt price movement

Reply
    Justin Bennett says

    I look for the most influential areas.

    Reply
      KEVIN MUTEMBEI RIUNGU says

      Hi Justin. Thanks for your candid analysis. On 24 this month the pair seems to have formed a double top formation with confirming bearish engulfing candle. Do you think the bearish momentum might have fizzled already?

      Reply
Sam says

Hi Justin,

Thank you!

I asked you about this pair last Friday.

Thanks!

Reply
Aly says

So do u recommend to stay in the sidelines during this week coz of those events ? Or shall i enter a trade if there is a price action signal formed for USD markets or JPY ?

Reply
    Justin Bennett says

    I recommend that you follow the rules you’ve outlined for yourself. If you haven’t done that yet, you should do so before placing your next trade.

    Reply
Deos says

Hi Justin, nice analysis, i have same view… what about the breakdow of the midterm uptrendline starting from lat november ? does that not signal a move lower on technical basis?

Reply
    Justin Bennett says

    It’s possible.

    Reply
Chucks says

You normally write on wonderful set ups almost on daily basis which give almost five set ups in a week but you wrote on “5 Trading Resolutions for a Successful 2018” that your goal is to have not more than four set ups in a month. So I find it difficult to balance the two scenario. Please clarify me

Reply
    Justin Bennett says

    I usually point out 8 to 12 different currency pairs each month. Less than half of those turn out to be valid setups.

    Reply
      Bart says

      Nicely said,I will back him up! He is not a signal provider but aTRADER! I folloow his advice but I do my own trades! It is just a very good guide and something too look out for!Not being rude but he is honest and give good analysis!

      Reply
      Bart says

      My post was for CHUCKS below!!

      Reply
Bart says

AGAIN A BRILLIANT CALL JUSTIN!Will look for it but not short now but soon! And you are so good for spotting this and let us know! And there is a lot of resistance!

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Innocent says

Wow, thank you so much for the AUDJPY.I took the trade last night after receiving your email and now it is in huge profit.you are a Guru in this.

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Priscilla says

Thank you Justin for your analysis. its getting better in understanding price action.

Reply
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