Daily Analysis – 11/07/2011

ForexPros Daily Analysis July 11, 2011

AUD/JPY at New Resistance

After the nice run up in March, when the AUD/JPY appreciated from 74.48 to 90.02, this pair has not done much. The Japanese became “lifeless” and the price is largely responding to what happens to the Australian Dollar. As a result, its action on the daily chart has been moving primarily sideways, with a downward slant.

In a quiet manner, the AUD/JPY dropped to 84.31, rebounded slightly and then made another low for the move at 84.05. Recently though, the volatility increased to some degree and the price advanced to 87.57 on Thursday, which is an important point right now because it coincides with couple of possible resistance levels.

There is a minor high from few weeks ago, as well as a down trendline. It is the confluence of these two factors that makes this particular resistance important. Whatever happens at this level, can easily determine the direction of the AUD/JPY for the near future.

An upside breakout here will likely mean a bullish continuation, perhaps going as high as to test the 90.02 high. On the other hand, a reversal can send the price back down to 84.05, maybe even lower. We should have the answer within next 1-3 days.

Forex Trading analysis written by Mike Kulej for Forexpros.

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