AUD/JPY market outlook (DEC-JAN)

Summary

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AUD/JPY Price Analysis and Day Trading Strategy

Overview: The analysis of AUD/JPY close prices reveals consistent patterns in price action and highlights opportunities for informed trading decisions. By leveraging descriptive statistics, historical trends, and visual insights from the provided data, this document summarizes the observed patterns, key levels, and day trading strategies tailored to the market dynamics.

Data Insights:

1. Descriptive Statistics: Range: Prices fluctuate predominantly between 94 and 102. Support Level: Strong base identified around 94, where prices have repeatedly rebounded. Resistance Level: Significant psychological barrier observed at 100–102, with frequent pullbacks. Volatility: Highest in mid-September to mid-October, with rapid price movements.
2. Visual Analysis: Downtrend to Uptrend Transition: Prices fell sharply from 96 to 94 in early September but recovered strongly by October, peaking at 102. Sideways Action: Between mid-October and mid-November, the market traded within a narrow band of 98 to 100, showing indecision. Recent Stabilization: In late December, prices appear to stabilize between 96 and 98, indicating reduced volatility and potential consolidation.
3. Patterns Observed: Bimodal Distribution: Closing prices exhibit peaks near 98 and 100, reflecting market hesitation at these levels. Key Levels: Support: ~94. Resistance: ~100–102. Recovery Tendency: Prices consistently rebound from the 94 level, underscoring its significance as a support zone.

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	Open	High	Low	Close
count	100	100	100	100
mean	98.80034	99.295	97.89434	98.7616
std	2.01723	1.96444	2.394636	2.023739
min	94.236	94.562	89.485	93.4
25%	97.36525	97.9265	96.321	97.40875
50%	99.197	100.0315	98.108	98.9475
75%	100.5768	100.9553	99.945	100.5548
max	102.232	102.403	101.35	102.256
        

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Findings:

Hourly Support Levels:

1. 96.00–96.20: Frequently observed as a strong support zone where prices stabilize during pullbacks. Rebounds are often initiated from this range.
2. 94.50–94.70: Acts as a deeper support level, particularly during periods of increased volatility. Historically, this level has marked significant recovery points.

Hourly Resistance Levels:

1. 98.00–98.20: Represents a key resistance zone, as prices often reverse or consolidate near this range. Ideal for profit-taking on long positions.
2. 100.00–100.20: Serves as a psychological and technical resistance level. Breakouts above this zone often lead to momentum-driven price moves.

Strategy Recommendations:

1. Range-Bound Trading: Buy near support levels (96.00, 94.50) and sell near resistance levels (98.00, 100.00). Use tight stop-loss orders just below support or above resistance for risk control.
2. Breakout Trading: Enter long positions on a confirmed breakout above 100.20, targeting 102.00. Enter short positions on a breakdown below 94.50, targeting 92.00.

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The descriptive statistics provided for the Open, High, Low, and Close prices offer critical insights into the behavior of the AUD/JPY pair. These statistics assist in confirming the findings and patterns observed in the data and provide additional quantitative context for decision-making. Here's how this information can be applied:

Key Observations and Applications

?Range of Prices:

• Highs: The highest recorded price is 102.403, and the lowest is 94.236 across all price categories.
• Lows: Prices drop as low as 89.485 for the Low data, indicating the deepest retracement.
• Implication: Support Zones: The minimum values reinforce the 94–95 zone as a critical support range, particularly for the Close prices. Resistance Zones: The 102 level is validated as a strong resistance, given its proximity to the observed maximum values.

Central Tendency (Mean and Median):

• The mean (average) close price is 98.76, close to the median (98.94).
• The central tendency suggests that prices tend to hover around the 98–99 range, which aligns with the previous observations of price clustering in this range.
• Implication: Use the 98–99 level as a pivot or equilibrium zone when constructing range-bound strategies.

?Volatility (Standard Deviation):

• Highest Volatility: Observed in the Low prices (std: 2.39), indicating significant price retracements and spikes.
• Lowest Volatility: Seen in the High prices (std: 1.96), indicating more stability during upward movements.
• Implication: Expect wider fluctuations near support levels, especially when prices approach their Lows. Resistance zones are comparatively less volatile, indicating steadier price action at higher levels.

Interquartile Ranges (25th, 50th, 75th Percentiles):

• Close Prices: 25% Quartile (97.41): Suggests a common support level for consolidation. 75% Quartile (100.55): Highlights a significant resistance range before breakouts to higher prices.
• Low Prices: The 25% Quartile (96.32) is a reliable intraday support level for range-bound trading.
• Implication: Day Traders: Can target the 97.41–100.55 range for intraday positions. Breakout Traders: Focus on opportunities beyond 100.55 for longs or below 96.32 for shorts.

?Price Clustering:

• Mean and Quartile Alignments: The mean close price (98.76) aligns closely with the median (98.94) and lies between the 25th and 75th percentiles. This indicates frequent price clustering around this range, confirming it as a key pivot area.
• Implication: Use the 98.5–99.5 range as a key decision-making zone for entering or exiting trades.

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