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Saturday, February 27, 2021

Australian Greenback Technical Forecast: AUD/USD, AUD/JPY, EUR/AUD

Australian Greenback Technical Forecast: Bullish

It was a forceful present of power for the Australian foreign money this week as AUD hit recent yearly-highs in opposition to the main currencies of USD, JPY and the Euro. In a backdrop the place unfastened for longer guidelines the day, the hues of optimism round Australia have helped to deliver patrons to the bid, driving the foreign money thus far for a lot of early-2021 commerce and, larger image, for the reason that pandemic lows had been set final March.

This story may in all probability be informed finest in AUD/JPY

The pair was already on its again foot coming into 2020 commerce, reeling from a mix of weak spot within the Australian economic system together with a common trace of danger aversion that had helped to deliver upon a stronger Japanese Yen. In fact, with looming commerce wars within the background, ‘danger on’ sentiment was troublesome to muster on the time, and because the coronavirus started to get priced-in to markets early final yr, danger aversion reared its ugly head as AUD/JPY examined beneath the 60.00 stage for the primary time for the reason that 2008 Monetary Collapse.

That check was fleeting, nevertheless, as the psychological stage helped to deliver patrons again to the bid; and initially, this helped to sluggish the sell-off.

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As the chance commerce began to return with gusto in April and Might, AUD/JPY moved together with it, reversing these prior losses and starting to indicate indicators of power. And that theme largely continued by the 2021 open, at which level AUD/JPY started to search out resistance round one other psychological stage on the 80.00 deal with.

This led into back-and-forth value motion in January and thru the February open, and once I wrote up the Analyst Decide on this setup final week, that gyration had simply begun to offer method on short-term charts because the inverse head and shoulders sample that had constructed on long-term charts started to offer method. That breakout has continued to run by this week as AUD/JPY now trades at recent two-year-highs.

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AUD/JPY Weekly Value Chart: Inverse Head and Shoulder Breakout

AUD/JPY Weekly Chart

Chart ready by James Stanley; AUDJPY on Tradingview

At this level, merchants not lengthy AUD/JPY have the sophisticated conundrum of making an attempt to work with an overbought development after a recent breakout. And whereas there’s been ample motive for the event of this development, there may very well be pullback potential into subsequent week, and on the four-hour chart beneath, I’ve recognized two doable areas of higher-low help that may hold the door open for bullish development situations.

AUD/JPY 4-Hour Value Chart

AUD/JPY 4-Hour Chart

Chart ready by James Stanley; AUDJPY on Tradingview

AUD/USD Drives In the direction of .8000 Massive Fig

An identical conundrum presents itself in AUD/USD the place a red-hot bullish development has moved into an overbought state, making for a difficult backdrop to these trying to proceed that transfer. However, equally, pullbacks may very well be a doable method of shifting ahead right here, trying to institute development buying and selling logic after the recent breakout; and beneath I look into three totally different areas of doable higher-low help in AUD/USD. The closest runs from .7820-.7836, with the deeper zone exhibiting round .7708-.7728.

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Building Confidence in Trading

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AUD/USD 4-Hour Value Chart

AUD/USD 4-Hour Chart

Chart ready by James Stanley; AUDUSD on Tradingview

EUR/AUD Strikes In the direction of Lengthy-Time period Trendline

Whereas the Euro hasn’t been as typically weak because the US Greenback or the Japanese Yen for the reason that pandemic started, extra just lately, the Euro has been seeing an rising quantity of strain. However from this week the large takeaway was simply how robust the Australian Greenback was and this displays nicely within the EUR/AUD chart.

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Top Trading Opportunities in 2021

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From the month-to-month selection beneath, we will see the place a long-term trendline has come into play this week because the pair has pushed all the way down to recent two-year-lows. If EUR/AUD does maintain this line of help into subsequent week, it may make for an attention-grabbing reversal play, notably for people who need to fade this latest spherical of Aussie power.

EUR/AUD Month-to-month Value Chart

EUR/AUD Price Chart

Chart ready by James Stanley; EUR/AUD on Tradingview

— Written by James Stanley, Strategist for DailyFX.com

Contact and observe James on Twitter: @JStanleyFX

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