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AUDJPY Above Ichimoku Cloud Ahead of Australian Data Dump

By 12/04/2017 No Comments

AUDJPY Ichimoku Analysis: The AUDJPY pair bottomed out and broke above the 4-hour Ichimoku cloud as Australia gears up to release a bunch of top-tier economic figures. How high can Mr. Aussie go? Let’s take a look at 3 key points of IDDA technique to find out; Technicals, fundamentals and market sentiment.

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1- AUDJPY Ichimoku Analysis

After dropping almost all November, AUDJPY formed a Triple Bottom chart pattern. The pair broke above the neckline and the 23% Fibonacci retracement level of 85.27 on Friday. Then it confirmed above the opened above the Ichimoku cloud’s 4-hour setup earlier this week.

>>Learn about Ichimoku – Fibonacci Strategy Development

During Tuesday’s trading sessions AUJPY Ichimoku progress was according to our Ichimoku Secrets strategy, as it pulled back towards just above the upper band of the cloud, and the shot up.

 

AUDJPY Ichimoku Strategy - 4 Hour Chart

AUDJPY Ichimoku Strategy – 4 Hour Chart

AUDJPY Daily Chart

On the daily chart, the pair formed a bullish engulfing candlestick pattern earlier during Tuesday’ Asian session. It is currently testing the 50% Fibonacci retracement level. The Fibonacci setup retraces the pair’s price from the lows of June 2017, to the highs of September. The pair remains below the daily Ichimoku cloud.

AUDJPY Ichimoku Strategy - Daily Chart

AUDJPY Ichimoku Strategy – Daily Chart

 

Support is set at 85.14. Resisting Pivot is set at 87.04.

2- Upcoming Market Moving Evens

The second point of the IDDA looks at the fundamentals of the countries’ currency.

Australia’s side

First up is Reserve Bank of Australia (RBA)’s rate statement on Tuesday. The RBA  is widely expected to keep interest rates unchanged at 1.50%. Again. But this particular announcement could still be influential for AUD direction. After all, it’s the RBA last statement for the year and they won’t be meeting again until February!

Keep in mind that most leading inflation indicators for Australia have been ticking lower. Therefore, traders will be listening to RBA’s head Lowe to see if he sends any jawboning hints here and there.

Next, is Australia’s GDP for the third quarter on Wednesday. On a YoY basis, market participants are speculating that Australia’s GDP grew to 3%. That is versus the previous reading of 1.8%.

However, on a quarterly basis, the general consensus is that the economy shrank 0.1% to 0.7%. With this, we could expect a bit of mixed behavior on AUD crosses as the traders digest the results.

Other than these two top-tier events, we have a couple of more data out of Australia the rest of the week. Namely, their Trade Balance (OCT) on Thursday, and Home Loans (MoM) (OCT) on Friday.

While these events add on to the riskiness of AUDJPY trading, it could also create some incredible opportunities to make some pips.

 

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3- AUDJPY Market Sentiment

The third point of IDDA looks at market sentiment. On Monday, retail trader data showed 54.8% of traders are net-long the AUDJPY. The number of traders net-long is 8.0% lower from last week, while the number of traders net-short is 38.0% higher than 6.8% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests AUDJPY prices may continue to fall. Yet traders are less net-long than yesterday and compared with last week. Recent changes in sentiment warn that the current AUDJPY price trend may soon reverse higher despite the fact traders remain net-long.

 

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Final Thoughts…

As the 4th point of the IDDA, you must calculate your risk tolerance before deciding on the investment strategy that is suitable for your portfolio. At the moment, we mostly have a short-term bullish signal for the AUDJPY pair according to the IDDA technique. Join our investing group to get the latest trading signals, stop-loss, take-profit and other limit order ideas. Our comprehensive signals will help you create a unique strategy for you, according to your risk tolerance.

 

xoxo

Kiana Danial

 

 

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