Forex: AUD/JPY capped again below 103.10, China data on tap later in session

FXstreet.com (Barcelona) - The AUD/JPY closed the US session 55 pips lower at 101.95. The pair had at one point traded as high as 103.00 but was unable to maintain a firm bid at higher levels and eventually leaked lower much of the afternoon. All eyes will be on data out of China during the upcoming Asia session, as HSBC Manufacturing PMI (51.4 forecast) will be released at 1:45 GMT. Also note, Australia CPI will be released later in the week on April 24th at 1:30GMT.

According to Nicole Elliot, CFTe, of ForexTrading TV, “In looking at the 4 hour chart, it appears we again have failed against the 61.8% Fibonacci retrace of 1.0305.” While below that, I’d be looking to sell with a target back near the mean of the Bollinger band that lies at 101.69, which also lines up with the 38.2% fib retracement of 101.59. Set stops above the upper Bollinger band of 103.18.”

From a pattern perspective, there is a possibility the recent 4 days of price action may be forming a short term “bear flag”, which would have a measured move target of near apx 95.10. In order for the pattern to be confirmed, the pair would need a daily close below the short term support trend line which comes in near 101.60 (note this also lines up with the levels mentioned above). Furthermore, a close above 103.20 would negate the pattern and could open the doors to further upside near 103.80 and higher.