AUD/JPY Daily Chart 11/4/2012 8:40PM EST
Range: It depends how you define range. When looking at the daily chart, the market established a support around 79.35 since June, and you can say that it started to whip back and forth across the 200-day SMA in July. By these observations, AUD/JPY has been ranging for about 4 months. If however, you define the range to start in mid-August, the last high, then we have been ranging almost 3-months. Whichever way you see it, as we start the week (11/5 Asian session), the AUD/JPY is testing this August high, with a slight crack already from Friday (11/2).
Trendline Breakout: It should be noted that the AUD/JPY has broken above a declining trendline that goes back to the 88.61 2012-high, from 3/19. However, as we know that the breakout is in a range-bound manner and therefore needs confirmation. Clearing above 83.60 should introduce a bullish outlook and expose the 2012 high. The RSI has not been able to hit 70, since earlier in the year when the Australian dollar – Japanese yen pair was at its 2012 highs. A tag above 70 should help confirm the start of bullish momentum back toward these highs.
Target: Before the 88.61 high, a support/resistance pivot at 84.80 should be monitored for resistance and considered a short-term target for the bullish outlook. A range breakout projection (using the width of the range into the direction of the break) targets a slightly more aggressive 87.50-87.80 area.
Failure: At this point the focus is on the break from the range, but a throwback below 82.30 will dampen the bullish outlook, and a break below 81.50 puts the focus back to the range support.
Fan Yang CMT is a forex trader, analyst, educator and Chief Technical Strategist for FXTimes – provider of Forex News, Analysis, Education, Videos, Charts, and other trading resources.
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