- The Australian dollar has shown itself to be fairly weak against the Japanese yen here during the trading session on Thursday.
- All things being equal, this is a market that also has to keep in mind that the 50 day EMA sits just below, and that obviously will attract a certain amount of attention by technical traders.
- Just below there, we have the 92 yen level, which has been important a couple of times.
We've seen support twice before breaking down below it. And then once we reached it again, it was resistance. We broke above that and then it became support. So, the question now is, do the buyers come into the market and start buying?
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I think a lot of this comes down to risk appetite, it is a little bit ironic that the Australian dollar itself isn't doing better during the session, considering that the NASDAQ, gold, silver, and some other risk appetite based assets have had a cracker of a day turning around after initially selling off. It's a somewhat interesting price action we have now.
Bounce Could Be a Buy Signal
Because of this, I'll be looking to see if we do in fact bounce that might be a signal to start buying again. But if we break down below the 92 yen level, that could be very ugly. This is almost certainly a decidedly Australian dollar problem because some of the other currencies don't look anywhere near as poor against the Japanese yen at the same time. If we could turn around and break above the 96 yen level, that would be extraordinarily bullish. Because not only would you break a significant support and resistance area that's been tested multiple times, but you would also be breaking above the crucial 200-day EMA.
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