AUDJPY Market Correction Forex Setup – Sept 10, 2014

0
113

AUDJPY Market Correction Forex Setup - Sept 10, 2014A correction forex setup may be playing out for this pair, after AUDJPY has recently broken the major resistance level at the 96.00 psychological handle a few weeks back and made a strong rally to the 98.75 area. However, price appears to be retreating as traders booked profits and sentiment appears to be turning for the Australian dollar.

With that, price could pull back to the broken resistance zone, which might act as forex setup support from now on. This is in line with the 50% to 61.8% Fibonacci retracement levels, which might keep any losses in check. A shallow retracement might last until the 38.2% level only, which is near the 97.00 major psychological support.

Stochastic has already reached the oversold region, indicating that selling pressure is weakening. When the oscillator moves out of the oversold zone and starts heading north, price could resume its climb and possibly test the previous highs near 98.75. Stronger buying momentum might even lead to the formation of new forex setup highs beyond 99.00.

Forex Setup Forecast

Weak Japanese data could keep yen gains at bay, as the BOJ is being pressured to increase stimulus for the economy. Meanwhile, Australia is also showing a few signs of weakness, along with China. The recent dip in Chinese imports spells downbeat prospects for Australia’s export sector, which accounts for a huge part of overall economic growth.

The event risk for this forex setup is the Australian jobs release tomorrow and the Chinese CPI. Earlier today, Japanese core machinery orders and PPI already came in below expectations.

Weak Australian jobs data could trigger a deep forex setup retracement to the 96.00 level while a strong figure could lead to an early bounce of the 97.00 major psychological support level. Do take note though that US President Obama will announce the plan for ISIS and any event that might lead to a risk-off environment could push AUDJPY back below 96.00.

To contact the reporter of the story: Samuel Rae at samuel@forexminute.com

SHARE
Previous articleDaily FX Trading Review: EUR Market Corrections Taking Place – Sept 10, 2014
Next articleForex Video Briefing (9/9) – GBP/USD, GBP/JPY
Samuel Rae is an active retail trader across a variety of assets, including currencies, stocks and commodities and the author of Diary of a Currency Trader (Harriman House). His personal strategy focuses primarily on classical technical charting patterns with a fundamentally supportive bias, combined with a strict, risk management-driven approach to entries and exits. He is an Economics graduate from Manchester University, UK.