Technical Bias: Bearish (Short-term)
- Japanese yen was finally seen gaining ground against a basket of currencies including the Aussie dollar.
- Australian Westpac Consumer Confidence will be released by the Faculty of Economics and Commerce Melbourne Institute later during the next Asian session and expected to register a better reading.
- AUDJPY broke an important support area around the 100.00 level which could later act as a resistance.
Australian Westpac Consumer Confidence
Later during the next Asian session, the Australian Westpac Consumer Confidence index will be released by the Faculty of Economics and Commerce Melbourne Institute. The last reading was 96.6, and this release is poised for a better reading. It might be that this might turn out to be a nonevent, as the AUDJPY pair is mostly driven by the yen sentiment as of now. So, we need to closely monitor how the Japanese yen behaves during the coming days.
There was an important bullish trend line formed on the 4 hour chart of the AUDJPY pair which was breached earlier during the Asian session. This particular break ignited a bear wave in AUDJPY which took the pair towards the 98.80 support area where the Aussie dollar buyers managed to protect the downside. The pair even closed below the 200 simple moving average (SMA) — 4H which is a negative sign in the near term.
If the pair corrects higher from the current levels, then the 200 SMA (4H) might act as a resistance. Any further strength could take the pair towards the broken trend line where sellers are likely to appear again. The most important point to note here is the fact that the broken trend line is now coinciding with the 50% Fibonacci retracement level of the last leg from the 101.35 high to 78 low. So, the pair might struggle to pierce the 100.00-10 resistance area in the near term.
Overall, selling rallies close to the 100.00 level might be a good idea as long as the pair is treading below the 100 SMA (4H).