Chart of the week - AUD/JPY
“Double Top” in play for AUD/JPY
Short-term technical analysis (1 to 3 weeks)
Time-stamped: 31 Jul 2022 at 12:30 pm SGT
Source: CMC Markets
- Australia’s central bank, the RBA will meet on Tuesday, 2 August to decide on the magnitude of its next interest rate hike on the policy cash rate. Consensus is set at a 50 bps increase, a similar move that was decided at the prior July monetary policy-setting meeting.
- Recent price actions of the AUD/JPY cross rate since 20 July 2022 minor high of 95.77 has shed by -290 pips to print a low of 92.86 on last Friday, 29 July and formed a monthly “Spinning Top” for July that represents signs of exhaustion for the current medium-term uptrend phase from late November 2021 low.
- Bearish signals have emerged from an integrated technical analysis point of view. Watch the 94.70 key medium-term pivotal resistance after the likelihood of a minor bounce towards the intermediate resistance zone of 93.65/94.05 for a further potential impulsive down move towards the 91.60 support (neckline of the “Double Top”) in the first step.
- However, a clearance with a 4-hour close above 94.70 put the bearish tone on hold for a push-up to retest 95.60 and the 96.90/97.70 long-term pivotal resistance (a descending trendline that has capped previous rallies since October 2007 high).
- Negative elements; price actions have just staged a bearish breakdown from its former medium-term ascending trendline support from the 29 January 2022 low, price actions have evolved into a bearish “Double Top” configuration since the 8 June 2022 high right below the 96.90/97.70 long-term pivotal resistance and the 4-hour RSI oscillator remains in a bearish configuration since its bearish breakdown below its former key corresponding support at the 40% level, also it still has not reached its extreme oversold level of 16% which suggests that short-term downside momentum remains intact to support a further potential drop in price actions of AUD/JPY towards 91.60 (neckline support of the “Double Top”).
Disclaimer: CMC Markets Singapore may provide or make available research analysis or reports prepared or issued by entities within the CMC Markets group of companies, located and regulated under the laws in a foreign jurisdictions, in accordance with regulation 32C of the Financial Advisers Regulations. Where such information is issued or promulgated to a person who is not an accredited investor, expert investor or institutional investor, CMC Markets Singapore accepts legal responsibility for the contents of the analysis or report, to the extent required by law. Recipients of such information who are resident in Singapore may contact CMC Markets Singapore on 1800 559 6000 for any matters arising from or in connection with the information.
