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
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).
What is your sentiment on AUD/JPY?
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.
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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