What to expect from AUDJPY further?

How to work with this article?

In many ways, this pair is quite an exotic asset, which has its own philosophy and pitfalls. The confrontation between west and east, as well as a mix from qualities of both, makes this instrument more a ying-yang thing.

Basic arguments

Current market situation owes much to a weak macrostatistics of Japan on the background of stable Australia. After the Bank of Australia decreased the interest rate, both currencies became much close to each other. However, the situation when the money is cheap may lead to consumption growth and even stimulate it. On the other hand, Japan can not resist it, so all eyes on the dynamics of AUD.

Technical arguments

The correction on the market is quite considerable and has already ended...almost. However, from the fundamental point of view, it is still there, and the risks of backward movement are still high.

Analysis of big traders' positions

Picture 1. The chart of the AUDJPY price and the indicator of big traders for the period of 11.08.2019 - 10.09.2019.

As we can see in picture 1, the current fluctuations played a relatively small role and were insignificant in terms of overall opened positions of big traders. Even a correction was taken for granted and remained subdued. It indicated that the downward movement is not finished yet even the positions are not at minimums.

Let's sum it up

Investments in such assets as AUDJPY definitely have a higher level of risk. Overall foreign currency market at this moment is quite complex. Moreover, volatility is growing. However, many factors are indicating that the asset will move upwards.

The most rational strategy for now, in the current market situation, will be keeping 3 positions UP and 2 DOWN.

To open trades with the maximum effectiveness, we highly recommend to use the following indicators:

• Moving Average
• Bollinger Lines