AUD/JPY price analysis: moving higher to form the Gartley

AUD/JPY price analysis: although the move higher is corrective, it does offer ample reward against risk today for a counter trend move

AUD/JPY price analysis                                 

Market highlights from the past week

Thursday June 11: risk appetite dipped sharply on Thursday with markets unsettled by the negative reaction to Wednesday’s Federal Reserve statement and US coronavirus reservations

Friday June 12: global equity markets moved lower with disappointing Chinese data also undermining risk sentiment

Monday June 15: conditions were then boosted substantially by the Fed announcement of direct corporate bond buying in the secondary market

Tuesday June 16: US retail sales rebounded strongly for May, boosting optimism over US recovery prospects

Wednesday June 17: risk appetite dipped later in US trading amid coronavirus concerns and US political tensions

AUD/JPY price analysis

Let us have a look at the technical viewpoint: 

Monthly: traded to a multi-year low of 59.87 in March. We have seen a 28 per cent recovery from the base to the June high (76.79)

Weekly: previous resistance is located at 76.51. Previous support located at 69.95. Will we post a bullish reverse head-and-shoulders pattern? 

Daily: 161.8 per cent extension level located at 76.54 (from 59.87-70.17). From an Elliott Wave perspective this could/should be the fourth wave correction (complex). 

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Intraday four-hour: reversed at the 61.8 per cent pullback level of 75.08 (from 76.65-72.53). A move to 75.77 (78.6 per cent) will form a bearish intraday Gartley pattern. 

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Outlook: although the move higher is corrective, it does offer ample reward against risk today for a counter trend move. 

Possible trade set-up: 

Action: buying at 73.30

Stop: 72.70

Target: 75.70

Potential return on risk to first target:  R4 (reward 240/risk 60)

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Australian Dollar / Japanese Yen
Daily change
91.57
Low: 91.184
High: 92.175
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