Cross-asset price action is approaching key technical levels, offering important clues for the near-term outlook. AUD/JPY and CAD/JPY are both testing high-volume support zones with early signs of fading downside momentum. Meanwhile, the ASX 200 has bounced from a key support level and formed a bullish three-bar reversal, putting a breakout toward the 9,000 level back in sight. Here’s a breakdown of each setup heading into the new week.
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Technical Overview: JPY Crosses Test Support, ASX 200 Builds Toward Breakout
AUD/JPY Technical Analysis: Australian Dollar vs Japanese Yen
On Friday morning, I was eyeing a potential bullish breakout on AUD/JPY, with price holding above the March high and a bullish engulfing candle forming within an uptrend. However, the Japanese Yen surged during a risk-off post-NFP session, sending AUD/JPY sharply lower in its worst session since April and printing a strong bearish engulfing candle.
It’s too early to confirm that the bearish move has run its course, but there are initial signs that downside momentum is slowing. Monday’s range was less than half of Friday’s, and price is now approaching the high-volume node (HVN) support zone around 94.50. For now, I’m watching for signs of a swing low on the daily chart before reconsidering long opportunities in AUD/JPY.
Shorter-term, bears may look to fade minor rallies on the 1-hour chart. Notably, both the weekly and monthly S1 pivot points sit just above the HVN, and a bullish divergence is forming on the 1-hour RSI (14), suggesting a swing low in the Australian Dollar vs Japanese Yen may be close.
A break beneath 94.50 invalidates the these and marks the next leg lower.
Chart analysis by Matt Simpson - data source: TradingView AUD/JPY
CAD/JPY Technical Analysis: Canadian Dollar vs Japanese Yen
Price action on the CAD/JPY daily chart is similar to that of AUD/JPY, though it now sits at a key technical juncture, pressing against the rising April trendline. With the 200-day SMA just beneath current levels, a minor break below the trendline seems plausible. However, a bounce may also occur around the confluence of the 50-day and 200-day SMAs near 106.43.
Much like AUD/JPY, there's potential for CAD/JPY to drift lower toward its high-volume node (HVN) from the prior correction, which lies in the 105.80–106.00 region. A clean break beneath this zone could expose the 104.80 support level near the 105 handle.
For now, the focus is on whether bulls can defend the April trendline and regain upward momentum in the Canadian Dollar vs Japanese Yen.
Chart analysis by Matt Simpson - data source: TradingView CAD/JPY
ASX 200 Technical Analysis: SPI 200 Futures Eye 9,000 Breakout
The ASX 200 futures market bounced in tandem with Wall Street overnight, placing the Australian share market firmly back on breakout watch. I’ve outlined my bias for the ASX 200 to target 9,000 in recent articles, and highlighted the importance of the high-volume node (HVN) at 8,536 as a key support level.
Last week’s bullish pin bar perfectly respected that HVN, and we’ve since seen a textbook three-bar reversal (morning star pattern) form within the prevailing uptrend. This adds weight to the idea that a breakout may be imminent.
Bulls may look to buy dips towards last week’s low or the December high, anticipating an eventual move towards the 9,000 level in ASX 200 futures.
Chart analysis by Matt Simpson - Source: TradingView, ASX SPI 200 Index Futures, S&P/ASX 200 Index
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-- Written by Matt Simpson
Follow Matt on Twitter @cLeverEdge
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