AUD/JPY – Daily outlook 01 November 2011
The BOJ’s intervention early Monday saw the Yen finally coming back to life; however after initial volatility the markets did show signs of slowing back down. We saw the AUD/JPY pushing through its upper resistance at the 83.00 area in early trading only to reverse and close below resistance at the end of the NY Session.
With the pair showing signs of rejecting its resistance we could see the market falling in the coming days/weeks.
The strength of the resistance area is further confirmed by a 61.8 Fibonacci retracement level at 83.15. Taking the highest swing high and lowest swing low from this year we can see the market has retraced 61.8% of this swing and yesterday has showed signs of rejecting this level.
With the strong resistance of both the price and 61.8% Fib retracement the strength of the 83.00 area should not be disregarded as the market has potential to show further rejection and ultimately a push back lower. We will be looking for price action signals to go short at this area with an initial target of 80.00 or lower.