Forex Market: AUD/JPY trading outlook for December 21st

Friday’s trade saw AUD/JPY within the range of 86.16-87.99. The pair closed at 86.94, falling 0.48% on a daily basis, while extending the loss from Thursday. The daily low has been an exact test of the low from November 3rd 2015. In weekly terms, AUD/JPY added a meager 0.06% during the current week, following a 3.91% decline in the week ended on December 13th. The latter has been the sharpest weekly drop since the week ended on September 6th, when the pair depreciated 5.85%. AUD/JPY has slumped 2.26% so far during the current month.

On Monday (December 21st) AUD/JPY trading may be influenced by the releases listed below.

Fundamentals

Japan

Bank of Japan Monthly Economic Survey

At 5:00 GMT on Monday Bank of Japan is to release its monthly study on economic developments in Japan. Any positive changes presented in this release would usually support demand for the yen and vice versa.

Correlation with Major Pairs

Taking into account the week ended on December 20th and the daily closing levels of the currency pairs involved, we come to the following conclusions in regard to the strength of relationship:

AUD/JPY to NZD/USD (0.7991, or strong)
AUD/JPY to AUD/USD (0.5853, or strong)
AUD/JPY to GBP/USD (0.4851, or moderate)
AUD/JPY to EUR/USD (0.4343, or moderate)
AUD/JPY to USD/JPY (0.3914, or moderate)
AUD/JPY to USD/CHF (-0.4182, or moderate)
AUD/JPY to USD/CAD (-0.6418, or strong)

1. During the examined period AUD/JPY moved strongly in one and the same direction with NZD/USD and AUD/USD.

2. AUD/JPY moved strongly in the opposite direction compared to USD/CAD during the week.

3. AUD/JPY moved to a moderate extent in one and the same direction with GBP/USD, EUR/USD and USD/JPY during the period in question, while moving to a moderate extent in the opposite direction compared to USD/CHF.

Daily and Weekly Pivot Levels

By employing the traditional calculation method, the Monday pivot levels for AUD/JPY are presented as follows:

Central Pivot Point – 87.03
R1 – 87.90
R2 – 88.86
R3 – 89.73

S1 – 86.07
S2 – 85.20
S3 – 84.24

By using the traditional method of calculation again, the weekly pivot levels for AUD/JPY are presented as follows:

Central Pivot Point – 87.23
R1 – 88.31
R2 – 89.67
R3 – 90.75

S1 – 85.87
S2 – 84.79
S3 – 83.43