Audjpy Consolidate As Market Remains Cautious

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Audjpy Consolidate As Market Remains Cautious

AUD/JPY Consolidates Near 94.50 - 95.0 As Market Remains Cautious

Consolidation is the main phase in AUD/JPY as of late, as the market players await the next key catalyst. For now, the trading range of AUD/JPY is between 94.50 to 95.00 (50 pips).

Yesterday, the cross-pair staged an upside rally and ended the day with 0.32% gains. However, today, the pair trades near 94.98 and is down for the day with a -0.02% change.

BoJ Action And YCC Tweak

This change in AUD/JPY has to do with the fact that this cross-pair includes JPY as one of the main currencies. In simple words, any actions from BoJ can also impact the AUD/JPY as well. As of late, the market is talking about the rumors of YCC change, which is lending support to the JPY and pushing AUD/JPY lower.

On the daily chart of AUD/JPY, the price action remains sideways and is very close to getting inside the cloud of the Ichimoku indicator. This indicates a lack of trend that can continue for many days/weeks. However, in this case, the AUD/JPY price getting inside the cloud is a bearish sign that will lead to more downside.

Since we are talking about more downside in AUD/JPY, it makes sense to look at the upcoming support levels. The first support is the 94.65 level, which also coincides with the low of 30th October. Next up is the 93.96 and then the 93.50 support level.

If the AUD/JPY sellers clear all of these hurdles, the next stop will be 93.05 - 93.00. If we look at the top side, we have 95.00, which can be seen as the first major resistance on the upside, followed by 95.52 and then 95.89. After all of these levels, the most important resistance is the 96.00, which is also a round figure.

On the daily chart, the 20 SMA's location is 94.91, while the 50 SMA trades at 94.77. Any trend change in AUD/JPY will require a clear break of these dynamic resistance zones (the 20 and 50 SMA).

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