AUD/JPY to rally towards 2019 high at 80.72 – Credit Suisse

AUD/JPY is very close to an equivalent base, further reinforcing the positive risk-on tone. Economists at Credit Suisse expect the large ‘head and shoulders’ base to be completed and look for the pair to surge above the 80.00 level.

Key quotes

“The recovery in AUD/JPY from its YTD lows is approaching its first key test at 76.80/77.30 – the current year high, the ‘neckline’ to a potential base and the 38.2% retracement of the entire 2013/2020 fall.” 

“We are biased for further upside, in line with the 55-day average breaking above the 200-day average. Furthermore, the removal of the aforementioned 76.80/77.30 would see a large ‘head and shoulders’ base complete, in line with the recent improvement in risk sentiment. Resistance is seen thereafter at the medium-term downtrend at 78.28, then the 2019 high at 80.72, where we could expect to see a first attempt to cap, however the next level above here is at 84.03.” 

“Support is seen at 64.40, then 60.00/59.91, which ideally holds.”