Kay Van-Petersen
In this webcast, Saxo's global macro strategist Kay Van-Petersen, James Kim (Sydney Sales Trading) and Andrew Bresler (APAC Sales Trading), examine the big issues for the markets in the week ahead.
Medium term
Trade view / 16 April 2014 at 14:55 GMT

AUDJPY poised to renew March march

FX Trade Strategist /
Instrument: AUDJPY
Price target:
Market price:

The AUDJPY rally from mid-March stalled in the 96.00-96.20 area and the currency pair has languished in a 95.00-96.00 range ever since. The range trading may be coming to an end. The long-term Fibonacci retracement indicator suggests that the break of 95.30, which represents 50 percent retracement of the 85.94-104.80 12-month range,is projecting further gains to the 61.8 percent level. Japan's second largest bond fund announced that it is looking to increase Australian and New Zealand holdings, leading the announcement parade of Japanese Institutional investors. USDJPY support is notable in the 102.50 area and USDJPY trading for the new Japanese fiscal year should start to pick up. The latest data from China, although mixed, may lend some support to AUDUSD.

Management and risk description

The short-term AUDJPY uptrend from the beginning of February remains intact. AUDJPY is in a steep uptrend on the intraday chart and the rally appears to have stalled around 95.80, suggesting that a short-term dip may occur. The risk to this trade is that it may be premature, and existing resistance in the 96.00-20 area is containing the upside. Another major risk is if the Russia/Ukraine situation escalates, leading to JPY demand on safe haven flows.


Entry: Buy AUDJPY at 95.60.

Stop: 94.70.

Target: 97.60.

Time horizon: Three weeks.

Chart: AUDJPY 30-minute with intraday uptrendaudjpy
Source: Saxo Bank

Chart: AUDJPY 4-hour with strong resistance noted


Source: Saxo Bank

Chart: AUDJPY 5-year daily chart with Fibonacci target


Source: Saxo Bank

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