As a new week commences in Asia, we bring analysis from SocGen regarding two Asia Pacific pairs.
AUD/USD and USD/JPY are trading in interesting patterns.
Here is their view, courtesy of eFXnews:
AUD/USD confirmed a head-and-shoulder pattern last year and is extending the downtrend, notes SocGen.
“The monthly RSI has broken below a multi-year trend line support, suggesting continued weakness,†SocGen adds.
“In the short term though, the daily RSI has broken above a multi-month trend line resistance, giving credence to a price break. Thus, a recovery towards 0.8020, the 23.6% retracement from last July, is possible. However, such a rebound is likely corrective in nature, and AUD/USD should eventually drift towards the channel bottom at 0.72,†SocGen projects.
In USD/JPY, SocGen notes that it is retracing after testing previous-year highs of 121.85/122.
“The monthly indicator is testing a graphical ceiling, suggesting the possibility of a consolidation. The pair has reintegrated within a multi-month triangle and has violated an upward channel support,†SocGen notes.
“The pair is approaching 118.20, the 61.8% retracement from the January lows. The daily RSI is testing a graphical floor, suggesting 118.20 as an immediate support. A decisive break below 118.20 will confirm a deeper retracement towards the lower triangle limit at 116.60/115.50,†SocGen projects.
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