Forex Market: AUD/JPY daily trading outlook

Yesterday’s trade saw AUD/JPY within the range of 87.22-87.72. The pair closed at 87.32, falling 0.27% on a daily basis. It has been the fifth drop in the past ten trading days. The daily high was a lower-high test of the low from December 24th. In weekly terms, AUD/JPY added 0.33% during the past week, while extending the gain from the week ended on December 20th. However, AUD/JPY has depreciated 1.60% so far during the current month, following two consecutive months of gains.

At 12:49 GMT on Tuesday AUD/JPY was gaining 0.26% for the day to trade at 87.51. The pair touched a daily high at 87.61 at 9:50 GMT, which appears to be within a relatively tight area of resistance, formed during the past four trading days. Support may be received near the hourly 55-period EMA (87.42) at first and then – at the low from December 28th (87.22).

No relevant macroeconomic reports and other events, which may have an impact on AUD/JPY trading, are scheduled on Tuesday.

Correlation with Major Currency Pairs

Taking into account the week ended on December 27th and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

AUD/JPY to AUD/USD (0.7477, or strong)
AUD/JPY to NZD/USD (0.4813, or moderate)
AUD/JPY to EUR/USD (0.3271, or moderate)
AUD/JPY to USD/JPY (-0.2005, or weak)
AUD/JPY to GBP/USD (-0.3454, or moderate)
AUD/JPY to USD/CAD (-0.3495, or moderate)
AUD/JPY to USD/CHF (-0.6728, or strong)

1. During the examined period AUD/JPY moved strongly in one and the same direction with AUD/USD, while moving strongly in the opposite direction compared to USD/CHF.

2. AUD/JPY moved to a moderate extent in one and the same direction with NZD/USD and EUR/USD during the past week, while moving to a moderate extent in the opposite direction compared to GBP/USD and USD/CAD.

3. The correlation between AUD/JPY and USD/JPY was insignificant during the period in question.

Daily and Weekly Pivot Levels

By employing the Camarilla calculation method, the Tuesday pivot levels for AUD/JPY are presented as follows:

R1 – 87.37
R2 – 87.41
R3 (range resistance) – 87.46
R4 (range breakout) – 87.60

S1 – 87.27
S2 – 87.23
S3 (range support) – 87.18
S4 (range breakout) – 87.05

By using the traditional method of calculation, the weekly pivot levels for AUD/JPY are presented as follows:

Central Pivot Point – 87.28
R1 – 87.94
R2 – 88.66
R3 – 89.32

S1 – 86.56
S2 – 85.90
S3 – 85.18