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Forex: AUD/USD needs break above 1.0350/60; corrective pattern in peril

Just when technical reads appeared to indicate that a heavy Aussie may continue to track lower, especially after 1.0250 support got out of the way, strong and consistent buying emerged around 1.0225 in the European session, taking the spot rate as high as 1.0320 through NA before consolidating above 1.03, paring back Monday's losses in the process.

Whether or not the Aussie can build up on recent gains, much of it will depend on the ability and commitment from long players to take the last obvious swing high at 1.0348/50, which aligns with Feb 7/Dec 27 broken-support-turned-resistance. If buyers can regain that level, the volatile downtrend structure will start teetering, and sellers potentially stepping out of the market.

One interesting pattern identified by Fan Yang, chief technical analyst at FXTimes, is that the maximum number of pips achieved by buyers in each corrective along 2013, where four meaningful pullbacks can be observed have been 90+, and under 100 pips. "Today’s pullback has been about 95 pips so far" he notes.

According to Mr. Yang, "as a trader, you should probably be ready for both the yes and no answer. Yes means following the recently bearish trend after this 90+ pip pullback. However, a pullback above 100 pips could change things."

Fan prefers to err on the side of caution and suggests not fighting the downtrend until a push above 1.0360, and the falling channel resistance before considering a bullish outlook, which may allow further recovery to 1.0450-60, he says. In turn, "the bearish scenario has 1.0150-1.0165 key range lows in sight" he adds.

Forex Flash: Near-term USD/JPY top at 94.50 may be in place - NAB

The Yen continues to be exposed to the headwinds from the Bank of Japan’s anticipated shift to a more aggressive easing policy, comments NAB research team. The Australian-based institution adds that "the recent G7’s shot across Japan’s bows means policy makers may begin to soften their anti-JPY rhetoric." In this environment, "a near-term USD/JPY top may be in place around 94.50, at least until the new, more dovish BoJ Governors are installed in late March" NAB says.
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Forex: USD/JPY below 94.00 on G7 concerns

USD/JPY is currently at 93.27, off session lows at 93.14, a -1.05% lower from previous Asia-Pacific open yesterday, but still a +0.69% higher for the week so far, and unchanged from early NY past Tuesday. Nikkei index closed yesterday higher by +1.94% around the 11370 points, while SP500 closed in NY up +0.18% and gold +0.01%. Nikkei futures point for a slighlty lower open.
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