AUD/JPY which is it: a screaming SELL or screaming BUY?

The AUD/JPY has been hovering above a major support trend line for the last five weeks and I have previously suggested ( here and here) that this stalemate might be linked to the S&P500 negotiating major resistance near 2,100. Tonight’s NFP might help define where the S&P500 heads to next BUT whether the index then takes the AUD/JPY along too remains to be seen. At this major support level though the AUD/JPY is either a screaming SELL or a screaming BUY, however, I have no idea which it is just yet! Do you?

A/J 4hr: has bounced along above a major support trend line and near the key 80 level for the last five weeks. Will NFP tip the balance here?

AJ4

A/J daily: a month+ of up and down.

AJdaily

A/J weekly: this weekly chart suggests that a bearish 5-wave Elliott pattern might soon be over!

AJweekly

A/J monthly: the monthly support trend line has been in effect since the GFC back in 2008 and, thus, will carry some force with it. Note also the impact of the 80 level here too and how price closed just above this level for the month of May, although this has offered little help as yet! Whether this major trend line proves to be a force to continue to support price or a release of the flood gate-type of action remains to be seen. Either way, watch the trend line and the 80 level with tonight’s NFP for clues:

AJmonthly

S&P500 weekly: this huge index is negotiating a major S/R region at the 2,100 psychological level and this also ties in with a Flag trend line. The index closed above this level on Thursday but, at a minimum, a weekly close above 2,100 needs to be seen to be convincing. Watch how this index reacts to tonight’s NFP:

S&Pweekly

AUD/JPY and the S&P500: The 15 year chart below shows how the fortunes of the AUD/JPY and S&P500 are fairly highly correlated although there has been a bit of divergence of late. 

AJSPX

Any bullish continuation on the S&P500 though may eventually drag the AUD/JPY along as well and, thus, the currency pair might well prove to be a good BUY at these low levels; certainly a relatively low risk:high reward trade at this depressed region. However, any reversal with the S&P500 may help to tip the AUD/JPY below the support of this major trend line and it could then prove to be a relatively low risk:high reward SELL trade! It is likely to end up being one or the other but I have no clue just yet as to which it might be but, if you think you do, then please let me know!

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