Nick Nasad
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AUD/JPY - Finds Support at 61.8% Retracement of Recent Up-Swing, Possible Start of Bullish Continuation

Last time I looked at the AUD/JPY it was testing the pivotal 90 handle as resistance. It did manage to push above that level and reel off a 350-pip rally before stalling out at 93.55 area in the middle of this week.

  • What we see now following that high was a decent pullback - a 61.8% retracement of the move from Friday's low at 90.62 to the previously mentioned high.
  • Finding support there is a good sign that we may have a bullish continuation. 
  • RSI shows this as well as its retreat from overbought levels turned back upward above 40 - a sign that bulls maintain momentum.
  • The short term target is the previous high at 93.50.
  • Above that we look at pivots from the rally in late 2012/early 2013 and I can spot an important one at 95.20.
  • A failure to hold the recent low here at 91.75 (and consequently a break of the 55-EMA) would pretty much invalidate any short-term bullish posture, and we either start to see a further retrace to the 2-week rally, or some sideways action.

- Nick