AUDJPY has been moving sideways as seen on the range on its 1-hour time frame. Price found support at the 100.00 major psychological mark and forex resistance at the 101.00 major psychological level.
The pair is on its way to test the top of the range and forex resistance for now, as data from Australia in today’s Asian trading session has been strong. The country showed a 0.4% increase in retail sales, higher than the projected 0.1% uptick, while the trade balance came in at a smaller deficit of 1.32 billion AUD compared to the estimated 1.85 billion AUD shortfall.
Forex Resistance Strength
Stochastic is indicating a pickup in selling pressure though, and this might be enough to take AUDJPY back to the bottom of the range before the resistance is tested. If so, price could make another move back to the 100.00 support zone before rebounding.
A breakout in either direction is still possible, depending on how risk sentiment fares for the day. The path of least forex resistance is still to the upside, as the BOJ is biased towards further easing and the Japanese economy is much weaker compared to Australia.
If price makes a move past the 101.00 forex resistance, it could head up by an additional 100 pips, which is the same height as the rectangle chart pattern. Similarly, a downside break below 100.00 support could lead to 100 pips in losses.
There are no major forex event risks for this setup today, as the reports from Australia have already been released and there are none lined up from Japan. Market sentiment might play a key role in determining price trends for the rest of the day, as the BOE and ECB rate statements could affect risk appetite. Dovish remarks from both central banks could drag higher-yielding currencies such as the Aussie lower against its lower-yielding counterparts like the Japanese yen.
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