Bullish Wedge Taking Shape in AUD/JPY

  • April 7, 2021 1:51 AM PDT
    The Australian Dollar typically follows risk trends, and with global
    equity markets trading choppily in recent weeks around volatility in
    global bond yields, the antipodean currency has been able to make much
    progress with respect to its multi-month uptrend. And while both major
    AUD-crosses, AUD/JPY and AUD/USD, have seen their gains slow, that
    doesn‘t mean that there isn’t more fuel left in the tank for further
    gains. Indeed, with a bull flag forming AUD/JPY rates and a bullish
    falling wedge forming in AUD/USD rates, the major AUD-crosses may soon
    turn higher.To get more news about [url=https://www.wikifx.com/us_en/]WikiFX[/url], you can visit wikifx.com official website.



    AUD/USDs uptrend from the March and November 2020 lows remains impaired,
    with the mid-March attempt higher failing to recapture the key
    trendline. But hope springs eternal: it may be the case that a bullish
    falling wedge is taking shape on the daily timeframe, with support drawn
    from the early-January high and early-March low, and resistance drawn
    from the late-February high and mid-March high.



      If this is the correct interpretation of price action, a breach of
    resistance coinciding with AUD/USD trading above its daily 21-EMA would
    be a necessary precursor before any confidence in the bullish falling
    wedge is validated. For what its worth, AUD/USD may continue to
    underperform AUD/JPY in an environment that remains appealing (from a
    technical perspective) for the US Dollar.AUD/USD: Retail trader data
    shows 54.98% of traders are net-long with the ratio of traders long to
    short at 1.22 to 1. The number of traders net-long is 8.29% higher than
    yesterday and 11.15% higher from last week, while the number of traders
    net-short is 16.37% higher than yesterday and 2.74% lower from last
    week.



      We typically take a contrarian view to crowd sentiment, and the fact
    traders are net-long suggests AUD/USD prices may continue to fall.



      Positioning is less net-long than yesterday but more net-long from
    last week. The combination of current sentiment and recent changes gives
    us a further mixed AUD/USD trading bias.In the prior AUD/JPY forecast
    update on March 18, it was noted that “AUD/JPY rates are working on a
    daily bearish hammer, not quite a bearish key reversal just yet. Still
    above its daily EMA envelope, its too early to say that this is the
    top.” The March 17 proved to be the high for the month of March,
    although by-and-large the pair remains in the confines of the February
    25 high/February 26 low range.



      With AUD/JPY still maintaining its uptrend from the March and November
    2020 lows (unlike its AUD/USD brethren), the pair appears to be in the
    midst of a sideways consolidation, which in context of the preceding
    move, looks like a bull flag. More gains may be coming soon; a lost of
    the February 26 low at 81.98 would invalidate the nascent bullish
    perspective.AUD/JPY: Retail trader data shows 38.84% of traders are
    net-long with the ratio of traders short to long at 1.57 to 1. The
    number of traders net-long is 16.05% higher than yesterday and 3.09%
    lower from last week, while the number of traders net-short is 7.64%
    higher than yesterday and 0.34% lower from last week.



      We typically take a contrarian view to crowd sentiment, and the fact
    traders are net-short suggests AUD/JPY prices may continue to rise.



      Positioning is less net-short than yesterday but more net-short from
    last week. The combination of current sentiment and recent changes gives
    us a further mixed AUD/JPY trading bias.