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Forex: AUD/JPY continues to form “pennant” pattern on daily chart

FXstreet.com (Barcelona) - The AUD/JPY closed the session up 50 pips at 101.18. It was a “risk on” theme across many markets which again seemed to benefit the commodity currencies such as AUD, CAD, and NZD. Later in the session, we will get the RBNZ Business Confidence at 1:00 GMT, followed by AUD Private Sector Credit at 1:30 GMT.

According to analysts at NAB Global Markets, "The RBA’s private sector credit data this morning are an input into next week’s RBA deliberations. These are likely to show a rise of just 0.2% in March, for annual growth of 3.1%, with business credit growth still soft. Housing credit will also be weak, although investor demand is still likely to be running slightly faster than owner-occupied borrowings."

From a technical perspective, the pair appears to be forming a large “pennant” continuation pattern on the daily chart which started back on April 15th. This pattern should re-solve itself in the direction of the current trend, which would be higher. A close above 102.50 would be needed to confirm an upside breakout, which would set a target up near 107.50. On the flip side, a close below 101.20 would confirm a down side breakout, and produce a measured move target near 96.20.

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