AUDJPY is stranded in an extended range, in a down trend. The structure is still bearish and the market has the potential to tap the support drawn. We will take the short position at the resistance level of the market. The market has formed lower lows and lower highs.

The ascending trendline is still developing for the market to retest or break it. 

The retracement area of 61.8% is in confluence with the resistance level, which indicates a decent short setup for the market. 

The EMA 50 is still bearish and this indicates the steepness of the curve, a downward pressure. 

RSI is at 46, which is a bearish region. We need to wait for the neutralized levels on the RSI and see where the market stands at the resistance level. We have to make sure we area in confluence with the technical factors.

Confluence for shorts

Break of support will catalyst AUDJPY for a further decline towards the lower support at the price of 92.20. This means, the trend is still bearish and we need to continue taking the bearish moves on the impulse. That being said, we will wait for the market to retest the support turn resistance and will look for a bearish position or candle printing at the level for continuing down.

The ascending trendline has been broken out for sells earlier and has been solidly validated as well.

There is no retracement condition on this setup right now.

The EMA 50 is still bearish and might retest the prices at the resistance level where we will confluence with multiple technical factors as well.

RSI is at 31 which needs to tap the 50 level in accordance with other technical factors. Therefore, we will wait for the market to retrace back at the area for the market to form alliance of multiple factors for us to pin down for a bearish move.

Support on the verge of breaking

AUDJPY has been in an uptrend and recently faked out from the resistance. Now, its back below the resistance and is retesting it. Now, previous low is being retested and price action is being created in a bullish pinbar. Once it starts moving, we will be targeting the next support. This means, market will move below the previous low making another bearish leg.

The ascending trendline has been broken out for sells. The price action has been validated for shorts, therefore, we have another confirmation for the shorts.

The fibonacci retracement which is in confluence with the resistance level is at 50%. This means, this confluence will act as a strong hold for the bearish move.

The EMA 50 is in a bullish trend. The market has the potential to retest the EMA 50 and therefore we can mark this as a profit target. Other than this, we do not have anything else on the moving average.

RSI is 48 which means, its in a bearish region. For a retest, we can wait for the market to tap back at the neutralized level of 50. Once this happens, we can have another confirmation with confluence for the short bias.

AUDJPY shorting from resistance retest

AUDJPY is range bound currently hovering between the support and resistance areas. Once market taps the resistance level another time, we will take the short position from the price point of 94.70. Market has formed a lower low and is not in the space of creating a lower high once this level is rejected. Therefore a good short setup stands at the resistance level.

The ascending trendline has induced breakout sells with price action validation. After that breakout sell, usually the market retraces back. Now, market is at the resistance level and another ascending trendline is in formation. Once this is broken out for sells, we will have a confirmation for the sells. 

The retracement area where we sells are in the region of 78.6% level of the retracement. This resistance level and retracement level are in confluence with each other. 

EMA 50 is flat right now which indicates not a strong move on the either side. This EMA 50 might break out for sells once market moves passed by them. 

RSI is at 49. This region is already a bearish region. In this region we see a sliding down of the market towards the over sold area. If market moves back towards our region of short positions, we might see a bearish divergence forming at the over bought region for this purpose.

AUDJPY shorts from resistance

AUDJPY is at support on H4 at the price of 92.70. This support will act as a catalyst for the mark up on the market. We will continue going long on AUDJPY from the support. Market structure is higher high and higher low on the pair. This deduces the trend as the bullish trend. 

The descending trendline has been broken out for the buys. After this breakout buy, we see market validating the prices and continue moving up. It is currently retracing and has the support formed. Once we see this bullish momentum or rejection from the support as price action, we will add the positions.

The golden retracement area of 75-78.6% is in confluence with the support level. This support will confluence and adhere to the retracement level. 

EMA 50 is bearish and the market is tapping the support region right now. Market would need to resort back above the EMA 50 as to consider the market in a bullish sentiment.

Buying AUDJPY from support

AUDJPY has been in an uptrend and has tapped the resistance level at the price point of 95.30. This resistance is a solid resistance and has the potential to push the market down. On H4, this current rejection would mark another bearish leg towards the downside, marking it another lower high to make the structure bearish.

is on the verge of breakout sell. Once the breakout sell is occurred, the validation will be pending for the closure of the candles below the trendline. That breakout sell has been validated by the breakout sell and now on a lower timeframe, we are having another breakout sell in the making. On the resistance side, we have descengint trendline which is being rejected by the market right now.

The resistance level is in confluence with the golden retracement area of 75-78.6%. This confluence has a strong impact on the bearish leg of AUDJPY. This price is at 94.90. We will be taking the shorts from here.

EMA 50 is still bullish. After the breakout buy, the EMA 50 was unable to be retested. Once we take the short position, we can carry it long till the retest of the EMA 50. With that we can extend our profits as well.

RSI is at 43. The oscillator needs to bring itself back to the 50 level at this current resistance level. Once the oscillator is below the 50 level, there will be an additional confirmation from the oscillator point to continue the market moving down.

Still bearish on AUDJPY, getting back the losses

The dollar index extended gains and strengthened almost 1.5% to approach 112 on Wednesday, following a 1.5% loss the day before which was its biggest one-day drop in more than two years. The ISM Services PMI beat forecasts and the ADP report pointed to another robust job growth, helping to push back expectations the Fed will start slowing the pace of monetary tightening. The next big catalyst for markets will be the nonfarm payrolls report on Friday.

Api Economic

Dollar Approaches 112

The dollar index jumped almost 1% to 111 on Wednesday, following a 1.5% loss the day before which was its biggest one-day drop in more than two years. Bets the Fed will start slowing the pace of monetary tightening faded, with investors looking for further data to support a slowing economy. Still, the ADP report pointed into another direction to a robust job growth while the trade deficit continues to narrow in the US. Early in the week however, the JOLTS report showed a bigger-than-anticipated fall in the number of job openings while the ISM Manufacturing PMI slowed sharply. Traders now await the ISM Services PMI release later today but the next big catalyst will be the nonfarm payrolls report on Friday.

DXY Gains Nearly 1%

The Russian ruble depreciated to around $60, the lowest in two weeks, as investors worry that new sanctions could restrict access to foreign currency in Moscow. The European Union approved a new package of sanctions against Russia, including a price cap on Russian oil shipped to third countries and mechanisms to avoid circumvention of sanctions. The ruble recovered 60% since hitting a record-low of 150 in March, as strict capital controls and trade imbalances stabilized the ruble despite crashes in other Russian financial markets, as the Kremlin mobilized its population and moved to annex eastern regions of Ukraine. Higher commodity prices partially offset lower export volumes to keep revenues somewhat in check, while the plummet in imports due to sanctions limited Russian demand for foreign currencies. Also, monetary authorities mandated hefty fees and negative interest rates on currencies from “unfriendly" states.

Russian Ruble Weakens to 2-Week Low

The British pound weakened below $1.14 from a three-week high of $1.15, after PM Liz Truss said the Conservative party will always be the party of low taxes while markets that were hoping for more withdrawal on the tax-cutting policies. The sterling recovered from a record low of $1.03 hit on September 26th after finance minister Kwarteng said the government would not cut the top 45% rate of income tax for the biggest earners, reversing earlier pledges. On September 23rd, the government announced a mini-budget worth £45 billion by 2026-27 that included several tax cuts, making investors worry about the sustainability of the UK's debt levels.

Sterling Eases from 3-Week High

The euro held below $1 in October, not far from a 20-year low of $0.95 hit at the end of September, as investors doubt the ECB will be able to fight against inflation while protecting an economy at increasing risk of recession. The European Central Bank is expected to continue hiking interest rates by large increments in the coming months after the inflation rate in the Euro Area hit an all-time high of 10% in September, well above the central bank's target of 2%. Still, Bank of France Governor Francois Villeroy de Galhau urged caution about rising the deposit rate above 2% and called for a more flexible and possibly slower rate hike path in 2023. Also, signs that the US economy is cooling down, sparked bets for less aggressive tightening by the Federal Reserve, which in turn, led investors to reduce bids on ECB rate hikes. Meanwhile, updated PMI data showed business activity deteriorated for three straight months, indicating falling GDP.

Euro Set to Remain Weak

The South Korean won held its recent gains to trade around 1,415 per dollar in early October, as the Bank of Korea said it expects inflation to stay elevated at the 5-6% levels for a considerable period, with upside risks from surging import costs. Those comments came after data showed annual consumer prices in the country rose 5.6% in September, slowing for the second straight month and coming in below expectations. Meanwhile, the won remained close to its lowest levels since 2009 as rising interest rates, global recession fears and a weakening external demand weighed on its export-driven economy. A widening trade deficit also pressured the currency, which is likely to reach around $50 billion in 2022 due to soaring costs of energy and other commodities, the largest-ever trade gap since the series began in 1964.

S.Korean Won Holds Gains After Inflation Data

The Indonesian rupiah strengthened above 15,200 against the US dollar on Wednesday after briefly hitting below 15,310 the day before, amid reports that President Joko Widodo plans to declare the end of the COVID-19 pandemic soon. Local media said that the leader had ordered the health minister to start a consultation process with the WHO before the country could start taking the first step toward the move. Meantime, Bank Indonesia is predicted to pick up its tightening pace, lifting further its key interest rate likely from the current level of 4.25% to 4.75% or higher by the end of 2022, back to where it was before the pandemic. Recently, central bank governor Perry Warjiyo mentioned that BI would raise interest rates further, but its policy tightening would not be as aggressive as the US Federal Reserve. Meantime, the dollar index weakened below the 111 mark, as a batch of macroeconomic releases in the US drove investors to place bets that the Fed’s tightening path may slow.

Indonesian Rupiah Appreciates

The dollar index stabilized above 110 on Wednesday, supported by expectations that the Federal Reserve will push borrowing costs higher and keep interest rates at restrictive levels until inflation falls back down to its 2% target. Investors also heeded hawkish signals from the Reserve Bank of New Zealand, which countered dovish hints from the Reserve Bank of Australia and reminded markets that many central banks are still prioritizing the fight against inflation. Meanwhile, the dollar dropped nearly 2% in the previous two sessions as weak US economic data and Australia’s smaller-than-expected rate hike prompted bets that the US central bank will slow the pace of rate hikes. Haven demand for the dollar also eased in recent sessions as the UK government dialed back proposed policies that rattled financial markets, while analysts suggested that the US economy could withstand more tightening before getting into recessionary conditions.

Dollar Stabilizes as Hawkish Fed Supports

The New Zealand dollar nearly 1% above $0.575on Wednesday after the Reserve Bank of New Zealand raised its policy rate by 50 basis points to 3.5%, as widely expected. The RBNZ has now raised interest rates for eight consecutive meetings, having previously signaled that it wanted to get rates to a restrictive level of 4% before pausing.

NZ Dollar Jumps After RBNZ Decision

The dollar index weakened below the 111 mark, a level not seen in almost two weeks, on speculation that weaker-than-expected US economic data would temper the Federal Reserve’s aggressive tightening. The number of job openings in the US fell more than expected in August, signaling that tighter financial conditions could be cooling the job market. This data came a day after a gauge of US manufacturing from ISM showed activity declined to the lowest since May 2020. Meanwhile, Fed officials continue to advocate for further rate hikes. New York Fed Bank President John Williams said that while there are signs of cooling inflation, underlying price pressures remain elevated, reinforcing the case for further monetary tightening.

Dollar Weakens Below 111

The South Korean won was changing hands around the $1,425 mark, close to levels not seen since March 2009, as investors grew concerned about the performance of the export-driven economy amid mounting global headwinds. Weak export prospects, particularly those to China, the country's largest trade partner, are set to drag the South Korean economy. The country's trade deficit is likely to reach around $50 billion in 2022, the largest-ever trade gap since the series began in 1964, amid a global economic slowdown and soaring energy costs. This sharp depreciation of the won forced the Bank of Korea to sell record dollars in the last months to stem currency weakness that threatened to further fuel inflation.

South Korean Won Hovers Near 13-1/2-Year Low

The Indian Rupee strengthened to the 81.5 per USD level, rebounding slightly from the record-low of 81.7 from the end of September and tracking a broad appreciation for riskier currencies as a batch of concerning macroeconomic releases in the US drove investors to place bets that the Fed’s tightening path may slow. Still, the tightening outlook for the Reserve Bank of India remains lower than those of its US counterpart. The RBI raised its main repo rate by 50bps to 5.9% in its last meeting, adding to the 190bps in rate hikes so far this year, aiming to support the weakening domestic currency and curb inflation that stubbornly remains above the central bank’s upper target of 6%. While limiting the downturn, efforts to defend the rupee by the RBI failed to stop the currency’s broad depreciation, with data pointing to over USD 100 billion being drawn from the central bank’s foreign currency reserves.

Indian Rupee Rebounds Slightly

The South African rand was trading around 17.8 per USD, the highest since September 22nd, amid a softer dollar on expectations of moderating interest rate hikes by the Federal Reserve. Meanwhile, the South African Reserve Bank is due to raise another 25 basis points in November and either January or March before pausing at 6.75% for the remainder of next year. The central raised the key repo rate by 75 bps for a second straight meeting in September, to firmly re-anchor inflation expectations close to the 4.5% midpoint of its target range to achieve the inflation target in 2024.

South African Rand Firms

The dollar index retreated for a third day to near two-week lows of 111.2 on Tuesday on bets the Fed may slow the pace of future rate hikes, after fresh ISM Manufacturing PMI figures showed an unexpected slowdown in US factory growth. Money markets now expect the central bank to raise rates by 125bps by March, below 165bps seen last month. Meanwhile, Fed officials continue to advocate for further rate hikes. New York Fed Bank President John Williams said on Monday that while there are signs of cooling inflation, underlying price pressures remain elevated, reinforcing the case for further monetary tightening.

Dollar at 2-Week Lows

The euro appreciated towards $0.99 in October, moving further away from a 20-year low of $0.95 hit at the end of September. Investors bet the European Central Bank will continue to raise interest rates in the coming months after the inflation rate in the Euro Area hit an all-time high of 10% in September, well above the central bank's target of 2%. ECB President Lagarde recently said the central bank would keep tightening its monetary policy, even as the region faces an economic downturn, with several ECB members calling for another 75 basis point hike later this month. Elsewhere, weak US manufacturing data highlighted a looming global recession and reduced chances of a faster policy tightening by the US Federal Reserve.

Euro Rebounds from 20-Year Lows

The offshore yuan appreciated past 7.1 per dollar in holiday-thinned trade in early October, recovering further from a record low of 7.27 hit late last month, helped by various measures from the Chinese government to stem its slide. Last week, the People’s Bank of China asked state-owned banks to prepare to support the yuan in offshore markets. The PBoC also raised the foreign exchange risk reserves for financial institutions in September, making it more expensive to bet against the local currency, and lowered the foreign exchange reserve requirement to 6% from 8%. Meanwhile, downside risks to the yuan persist as China’s monetary policy diverges with the US and as a gloomy domestic economic outlook dampened interest for Chinese assets. Official data showed that factory activity in China surprisingly expanded in September, while slowing services sector growth and a downbeat private manufacturing survey highlighted the country’s shaky economic recovery.

Chinese Yuan Holds Firm on Intervention Talks

The Philippine peso traded just below 59 against the dollar in early October, holding near a record low hit in late September and being at risk of further depreciation as the country’s widening trade deficit and slower pace of monetary tightening pressured the currency. The nation posted its largest trade deficit in over a decade in July at $5.93 billion amid surging imports, which in turn drive higher demand for the dollar and even larger trade deficits. The Bangko Sentral ng Pilipinas has lifted rates by a total of 225 basis points this year, but analysts warned that the lack of an off-cycle hike could drive the peso lower given a more aggressive US Federal Reserve. The BSP has also ramped up verbal intervention to stem the currency’s slide to little avail. Moreover, accelerated capital outflows added downward pressure on the peso, with Philippine equity outflows reaching $1.2 billion so far this year, Bloomberg reported.

Philippine Peso at Risk of Further Depreciation

The dollar index held steady around 111.6 on Tuesday after facing pressure in recent sessions, supported by a hawkish Federal Reserve that is expected to keep raising interest rates until it sees compelling evidence that inflation is trending down. New York Fed Bank President John Williams said on Monday that while there are signs of cooling inflation, underlying price pressures remain elevated, reinforcing the case for further monetary tightening. Meanwhile, the dollar fell half a percent on Monday and tracked a sharp decline in Treasury yields after softer-than-expected US manufacturing data signaled that tightening monetary conditions may be taking a toll on demand. This gave rise to speculations that the Fed may slow the pace of future rate increases. The dollar recouped some losses against the sterling, the yen and antipodean currencies, while remaining under pressure from a strong euro on expectations that the European Central Bank will tighten further.

Dollar Holds Steady on Hawkish Fed

The Australian dollar plunged nearly 1% toward $0.645 on Tuesday before paring some losses, as the Reserve Bank of Australia delivered a smaller-than-expected interest rate hike. The RBA raised the official cash rate by 25 points to 2.6%, defying market expectations for a bigger 50 basis point rate increase.

Aussie Plunges as RBA Delivers Smaller Hike

The dollar index weakened below the 112 mark, a level not seen in more than a week, as easing Treasury yields and a general risk appetite spooked investors away from the heaven currency. On top of that, a report from ISM showed that the US manufacturing activity grew at its slowest pace in almost 2-1/2 years in September, underscoring the challenging macro environment while suggesting that tighter financial conditions curbed demand for goods. The Fed raised interest rates by 75 basis points for a third consecutive meeting in September while forecasting rates to peak at 4.6% next year with no cuts until 2024, pushing back any dovish pivot that the markets were hoping for in the near term. This dollar’s weakness was seen across the board, with some of the most pronounced selling activity commodity-linked currencies, such as the Australian and New Zealand dollars.

Vasl Capital

Oct 05 2022

Confluence for shorts

Vasl Capital

Sep 23 2022

Support on the verge of breaking

Vasl Capital

Aug 31 2022

AUDJPY shorting from resistance retest

Vasl Capital

Aug 24 2022

AUDJPY shorts from resistance

Vasl Capital

Aug 04 2022

Buying AUDJPY from support

1

Vasl Capital

Jul 28 2022

Still bearish on AUDJPY, getting back the losses

1

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