- Aussie trades weaker across the board on dismal retail sales and trade data.
- Australia retail sales dropped 0.5 percent in December, missing market expectations for a 0.2 percent drop.
- Further, the trade balance recorded a deficit of AUD 1.36 billion in December compared to the AUD 0.2 billion surplus.
- The antipodean muted as RBA kept interest rates unchanged as expected, offered little surprises.
- AUD/JPY closed below 200-DMA. Technical studies are bearish, we see scope for further weakness.
- RSI and Stochs are biased lower. We also see -ve DMI dominance and ADX is rising to support trend.
- The pair is trading in a 'Symmetric Triangle' pattern and finds strong support at 85.50.
- Violation at 85.50 ('Triangle Base') will see scope for weakness till 84.66 (Dec 7 low).
- We see bearish invalidation only on breakout at 200-DMA at 86.50 levels.
Support levels - 85.50 (Triangle Base), 85.36 (78.6% Fib retrace of 84.349 to 89.089 rally), 84.66 (Dec 7 low)
Resistance levels - 86.16 (61.8% Fib retrace of 84.349 to 89.089 rally), 86.50 (200-DMA), 86.92 (5-DMA)
Call update: Our previous call (http://www.econotimes.com/FxWirePro-AUD-JPY-recovery-capped-at-100-DMA-bias-lower-200-DMA-at-8650-next-bear-target-1131830) has hit all targets.
Recommendation: Book partial profits at lows. Trail stop loss to 85.50, watch for decisive break below 86.50 for further weakness, target 85/ 84.70/ 84.35.
FxWirePro launches Absolute Return Managed Program. For more details, visit http://www.fxwirepro.com/invest
