By: Mike Kulej
In line with the general strength in the Australian Dollar, the AUD/JPY pair appreciated about 800 pips since the mid-August. Recently, however, this advance stalled and the price settled in sideways pattern, with a ceiling at 81.50.
This level is proving to be a major resistance for the AUD/JPY. It was tested twice, and held on both occasions, which is perhaps best visible on the intermediate term chart. At the same time, a support at 79.80 keeps the price within this narrow congestion. Since the preceding trend was up, chances are that a breakout in that direction will follow. Of course, there is no guarantee of such outcome, so activity around both extremes should be watched closely. It will be worth it, because the resulting move out of this congestion is likely to be in a 150-200 pips range.
The AUD/JPY is clearly waiting for a catalyst to nudge it either way. Technical indicators like the RSI and the MACD show neutral readings, exemplifying the lack of trend. Like all other Yen pairs, the AUD/JPY was affected by the intervention of the Bank of Japan. All official Forex oriented announcements from Japan should be followed with care because they may provide the spur for the AUD/JPY to start moving again.
