AUD/JPY Appears Bullish as Japanese Retail Sales Growth Slows Down

Yesterday, the Japanese retail sales figure was released by the Japan’s Ministry of Economy, Trade and Industry, which showed that it grew by 0.9% against a forecast of 0.8%. As the rate of increase was modest, binary options traders considered it a sign of weakness in the economy. This is primarily because the Japanese retail sales grew by 3.0% in June and a slow pace of growth indicated a further decrease in sales in the coming months.

In addition to retail sales, exports and household spending have also did not gain any significant momentum in the last few months. Hence, binary options investors are projecting a flat or slightly negative economic growth in Japan during the second quarter of 2015.

As a result, the AUD/JPY price climbed around 150 pips by the end of July 28 and formed a strong looking bullish outside bar (BUOB).

From a technical point of view, the AUD/JPY appears bullish for two reasons, first is the BUOB. But, more importantly, it closed above the psychological resistance around the 90.60 level.

AUDJPYDaily

Hence, a penetration above the high of yesterday’s BUOB would signal a bullish move towards the next resistance, which is around the congestion zone near 91.80.

Under the circumstances, it is recommended that trader place a CALL order for the AUD/JPY with their binary options brokers once the price penetrates above yesterday’s high, which is at 90.85

However, more conservative traders may consider waiting for the AUD/JPY price to close above yesterday’s high before placing a CALL order with this pair.

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Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and write on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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