AUDJPY just retested new resistance at 78.70.
I wrote about this area on Sunday. It previously served as range support for the pair in early September and again in late October.
The December 21 close at 78.15 meant that any retest of 78.70 would likely trigger an influx of selling pressure.
That’s exactly what we got just a few hours ago.
Yesterday’s high was 78.73 and AUDJPY is currently trading 100 pips below it so there’s no question sellers are now defending the 78.70 region.
As long as this area remains intact as resistance on a daily closing basis, I will stay bearish AUDJPY.
Remember, I use New York close charts so that each session closes at 5 pm EST.
You can go here to get instant access to the same charts I use.
I think the potential for shorts is excellent here.
Looking at the weekly time frame, there isn’t much support until the price reaches the August and September 2016 lows at 76.00.
However, the recent 530 pip range suggests we could see prices extend toward 73.30 over the coming weeks.
That makes a lot of sense when you view the price action since 2010.
Many swing lows reside between the 72.00 handle and 73.50.
But if you didn’t catch today’s retest of 78.70, it would be prudent to wait for another retracement.
You don’t want to chase a runaway market like this one. That’s especially true when liquidity is thin as it is now.
The lack of volume can trigger erratic behavior that can leave you on the wrong side of the market if you aren’t careful.
From here, the 78.70 area remains new resistance on a daily closing basis.
Key support comes in at 76.00 followed by 73.30.