- AUD/JPY up 0.28% on the day, currently trading at 88.73, near session highs at 88.75.
- Positive trading sentiment around copper prices underpinned the commodity-linked Australian Dollar.
- We see an inverted 'Head and Shoulders' pattern formed on the daily charts.
- The pair is struggling to break major resistance lies at 89.09 (double top). Breach there could see further upside.
- Scope then for test of 88.6% Fib at 89.62 ahead of 90.30 (Sept 21 high).
- On the downside, 20-DMA at 88.15 is major support and break below will drag the pair lower to test 100-DMA at 87.29.
- We see bullish invalidation on violation at 100-DMA support.
Support levels - 88.52 (5-DMA), 88.15 (20-DMA), 88.03 (61.8% Fib retrace of 90.305 to 87.349 fall), 87.29 (100-DMA)
Resistance levels - 89.08 (double top), 89.62 (88.6% Fib), 90, 90.30 (Sept 21 high)
Recommendation: Good to go long on breakout above 89.10, SL: 88.20, TP: 89.60/ 90/ 90.30
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