Technical Bias: Bearish
Key Takeaways
Australian dollar traded higher earlier this week, but failed to break an important resistance area.
In the US, the number of new home sales will be released by the US Census Bureau, which is expected to decline this time.
AUDJPY rallies might be sold as long as the pair is trading below the 93.50-94.00 pivot area.
Aussie dollar weakness might continue in the near term not only against the US dollar but also against the Japanese yen.
Technical Analysis
The AUDJPY pair after trading towards the 90.00 support area managed to correct higher, but found sellers on the upside. There is a major bearish trend line formed on the daily chart, which stalled the upside in the pair. Moreover, the 50% fib retracement level of the last leg from the 97.60 high to 89.38 low was also sitting around the same area. So, overall one can say that the 93.50 area is a major hurdle for the AUDJPY pair. This raises the probability that the pair might head lower in the near term. However, on the downside, the last swing low of 91.50-91.00 area might act as a barrier for the Aussie dollar sellers moving ahead.
If the AUDJPY pair manages to clear the highlighted trend line, then the next resistance might be around the 50-day simple moving average, which is around the 61.8% fib level.
Any further gains might be limited and dependent on how the Aussie dollar trades in the near term.
US New Home Sales
Later during the NY session, the number of new home sales in the US will be released by the US Census Bureau. The forecast is slated for a minor decline of 1.3% in January 2015, compared to the preceding month.
Trade Idea
One might consider selling rallies in the AUDJPY pair around the highlighted trend line considering the medium term view.
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