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Market Outlook
AUDJPY is a Sell?

AUDJPY is a Sell?

20-01-2022 07:52

After hitting TP last week, AUDJPY Again Shows an Opportunity to Sell on Strength

"Today is a very difficult day for our state," New South Wales (NSW) Prime Minister Dominic Perrottet said during a news conference on Tuesday (18/01) as the state reported 36 deaths, the highest level of the new pandemic. The case of Australia's Omicron is still rampant, coupled with the consumer confidence index dropping 2% to 102.2 points in January. However, there are still a few bright spots from Australia where the number of unemployed Australians fell to the lowest level since 2008 as the case for higher rates increases.

Meanwhile from the land of the rising sun, Japan's exports and imports in December hit record highs in terms of their value in yen as supply bottlenecks eased in late 2021 amid rising prices. Members of the Japanese government panel joined the BOJ in highlighting inflation risks which signaled the case for Japan's inflation to appear to be a major concern of the Japanese government.

You can read last week's AUDJPY prediction in here.

Quick Recap on AUDJPY

At first glance, AUDJPY still tends to stagnate with less significant movements in the long term. However, in the short term, the pair looks bullish with little hint for an immediate correction.

Let's dive in a little deeper to see how AUD/JPY fare on multiple timeframes:

AUD/JPY Monthly Technical Analysis

AUDJPY is a Sell?
Graph taken from TradingView.

From the monthly timeframe, we can confirm that the price is still choppy, hovering around the 50, 100 and 200 MA. Last month's candle closed bullish in the ranging area for the monthly timeframe. There is a possibility the monthly 200 MA line can hinder the pair's advance.

AUD/JPY Weekly Technical Analysis

AUDJPY is a Sell?
Graph taken from TradingView.

Last week, AJ's weekly candle closed bearish below the 50 MA line. There is a possibility that AJ will return to bearish towards the next support around 80,500 which is also the confluence level between the 100 and 200 MA lines. Coupled with clean traffic which adds to the possibility that AUDJPY can plunge on a weekly timeframe.

AUD/JPY Daily Technical Analysis

AUDJPY is a Sell?
Graph taken from TradingView.

The AUDJPY daily timeframe shows a bearish sentiment where prices continue to form lower highs and lower lows, especially since the beginning of 2022. Yesterday's daily candle closed bullish indicating support that reflected the price to retest up again. The price also jumped from the 50, 100, and 200 MA lines.

Trading idea for AUD/JPY

AUDJPY is a Sell?
Graph taken from TradingView.

On the H4 timeframe, the descending channel that is formed is more clearly visible, which when combined with the Quassimodo pattern, there is a possibility that AJ will go up to retest to the right shoulder area which is also the top of the channel and fall back down, at least in the confluence area between the H4 support and the upper part of the channel. bottom of the channel.

Order: Sell Limit
Entry: 83,400
Stop Loss: 84,000
Target 1: 82,000 (50% + BE)
Target 2: 81,350 (25%)
Target 3: 80,500 (25%)
Total risk: 1-2% Equity (Medium Risk Setup)
Reason: Bearish structure, Quassimodo pattern, confluence descending channel

ZFX Analyst’s Predictions

The Omicron virus that infects Australians despite the government's lockdown. The consumer confidence index, which fell by 2%, indicates the weakening of consumer purchasing power and indicates the weakening of the Australian economy at the macro level. Plus the supply issues due to the lockdown confirm that fundamentally, the Australian dollar is likely to weaken in the near term.

The BOJ warned of caution against the risk that inflation could rise again due to soaring material costs. Indeed, Japan is an industrial country that exports technology to the world, where if the price of raw materials rises, it will increase the selling price which in turn will increase the burden of inflation in the country. Members of the Japanese government panel who joined the BOJ in highlighting inflation risks demonstrated a real commitment from the government to fight inflation. It is expected that the Yen will be more stable and appreciate soon.

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Risk Warning: The above content is for reference only, and does not represent ZFX’s position. ZFX does not assume any form of loss caused by any trading operations carried out in accordance with this article. Please be firm in your thinking and do the corresponding risk control.

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