AUD/JPY Forecast: Australian Dollar Continues to Threaten a Major Breakout Against Yen

• The Australian dollar has rallied again during the trading session on Monday, as it stubbornly refuses to pull back.
• The Japanese yen of course has been a punching bag for most currencies around the world in the Australian dollar won’t be any different.
• Remember, you get paid to hang on to this trade at the end of every day, and therefore I think it makes a certain amount of sense that we would see value hunters come back every time it pulls back.

It’s also worth noting that we are digging into several wicks that showed signs of resistance previously, and we are above the major intervention area that we had seen previously, and that makes quite a bit of sense that we would see noisy trading in this general vicinity. I think anytime you pull back in this market, you have to think of it is a potential value play, due to the fact that you get paid, and of course the Bank of Japan can’t do anything along the lines of tighten monetary policy, at least not anytime soon.

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Technical Analysis

There are several levels I’m looking at on this chart as a potential trigger for a trade. The ¥102 level is an area that I see a lot of support in, assuming that we can even fall that far. Above there, we have the ¥103.33 level that offer support, but even if we were to break through both of those, the 50-Day EMA is near the ¥102 level, so I think there are plenty of reasons to think that there would be buyers willing to get involved in what is a very long-term uptrend.

On the other side of the equation, if we do break out to the upside and clear the ¥105 level, and will almost certainly send this market much higher, perhaps to the ¥108 level based on historical charts. The pressure is most certainly building to the upside against the Japanese yen and not only this market, but several others as well, so please keep that in mind. You also have to pay swap at the end of every day to short this market, so you are either long, or on the sidelines.

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