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Weekly Forex Forecast (March 9 – 13, 2015)

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The coming week in the Forex market promises to be less volatile than the previous given the less-intense docket of news events. That said, we do have the RBNZ rate statement on Wednesday as well as the Australia employment figures that are sure to stir things up, so do factor in these two events when planning your trades.

We have several pairs that are starting to show their hand for the month of March, one such pair is AUDJPY. The pair has been in a downtrend since forming what now appears to be a major top in November of last year.

After falling more than 1,000 pips between November, 2014 and February, 2015, the pair began consolidating into a rising wedge pattern early last month. I wrote last week that this rising wedge appears to be coming to an end. Sure enough, Friday’s price action formed a bearish engulfing / bearish pin bar combination after being rejected by the 94 level.

While this formation alone may spark selling interest, it’s important that we get a daily close below the 93 handle before considering a short position. This level can be seen acting as support and resistance since the ’90s but can be seen influencing price more recently over the past four weeks.

A daily close below this level would have us looking for a sell signal on a retest as new resistance. Key support and a possible target for any short position comes in around 90.00, which is represented by weekly channel support from 2009.

Summary: Wait for a daily close below 93.00 and then watch for a retest as new resistance. More conservative traders can opt to wait for bearish price action on a retest, while those who utilize a more aggressive style of trading can take a blind entry. Key support comes in at the 90.00 round number.

AUDJPY daily forex chart

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