Traders Foresee Big Gains for the USD/JPY Pair this Wednesday
AUDUSD Potential Correction | Pullback to Moving Averages
AUDUSD has been trending lower and finding resistance at the 100 simple moving average recently. Price appears to be finding a bottom near the .8850 minor psychological level and may be due for a correction to the SMAs once more.
The 100 SMA currently lines up with the .8900 major psychological level, which might hold as resistance in the event of a retracement. A higher pullback could last until the .8950 minor psychological mark, which has served as an area of interest. If price pulls back even higher, the .9000 major psychological level near the 200 SMA could serve as a line in the sand.
Further gains past the .9000 mark would signal that a reversal may be taking place. This could push AUDUSD back to the previous support at the .9200 major psychological level. However, fundamentals strongly favor the US dollar at the moment, as the Fed is moving closer to its exit strategy while risk aversion is also supporting the lower-yielding dollar.
Stochastic is already in the overbought area but it hasn’t crossed down yet, indicating that there may be a bit of buying pressure left before the pair resumes its drop. A selloff could take AUDUSD below the .8850 mark to the .8800 support area or lower.
EURJPY Major Retracement | Signs of a Reversal?
EURJPY appears to be having trouble sustaining its climb past the 141.00 handle, indicating that a market correction is due. In this case, price could retrace until the 139.00 major psychological level, which has served as a former resistance area.
A lower pullback could lead to a test of the 138.00 major psychological support, which also coincides with a broken resistance area. This is closer to the 100 and 200 simple moving averages, which might act as dynamic support for price action.
MACD is moving down, reflecting the presence of selling pressure. Stochastic just recently made it out of the oversold zone but is starting to head back down, suggesting that euro bears could still push prices a little lower.
An upside break from the pair’s current consolidation could mean that buyers are ready to charge once more, which could then take EURJPY to its previous highs near the 141.00 major psychological level or higher. A break past the previous highs could lead to a test of 142.00 or perhaps a longer-term rally until the 145.00 major psychological resistance.
USDJPY Consolidation Pattern | Rising Trend Still Valiy
Despite stalling near the 109.00 major psychological resistance level for days, the uptrend on USDJPY remains very much intact. Price might need a correction for now though, as the rally appears overdone.
MACD is moving down, indicating that selling pressure is mounting. Similarly, stochastic is pointing lower, which means that sellers could take control of price action from here. However, the potential selloff might not last as price could eventually find support at the 106.00-107.00 levels, which line up with an area of interest and the 100 simple moving average.
A deeper correction could last until the 105.00 major psychological level, which is near the 200 SMA. A break below this area could be a signal that the uptrend is over and that a reversal may take place sooner or later.
On the other hand, an upside break past the current consolidation or the 109.00 handle could signify that bulls are ready to charge once more and possibly push USDJPY to the 110.00 major psychological level or higher. Risk aversion appears to be favoring the US dollar at the moment, as data from the US has been much stronger compared to Japan’s and the BOJ is staying open to the idea of further easing.