AUD/JPY Pip Range Analysis

by Nov 14, 2019Forex Trading

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I want to give more insight with AUD/JPY analysis through following topics:

  1. AUD/JPY Name Analysis
  2. AUD/JPY Analysis Popularity
  3. How to Trade AUD/JPY
  4. Trading Session Pip Range
  5. What is AUD/JPY Daily Range
  6. AUD/JPY Weekly Range
  7. Monthly Range and Pip Range History
  8. What Impacts AUD/JPY Volatility
  9. Connection Between Volatility and News
  10. AUD/JPY Analysis – What to Take From Here

AUD/JPY Name Analysis

There is no special name for the AUD/JPY trading pair in the Forex world. But if you would like to have some name I would suggest using Yussie.

AUD/JPY Analysis Popularity

Both currencies, AUD and YEN, are major currencies but the pair is not considered as a major trading pair because it does not have USD currency in it.

But, even they are not major trading pair, the AUD/JPY is well traded on the Forex market. The AUD and the YEN are the currencies heavily dependent on the commodities. Australia as a exporter and Japan as importer of commodities.

Both currencies are close connected to the U.S. dollar due to large volume of exchanged goods between them.

Using these information’s from above you can see that both currencies are affected by U.S. news published and by commodities price change.

Traders love to trade AUD/JPY trading pair because when the U.S. dollar changes for sure the price of this pair will move. Especially, when there is change in the commodities price, AUD and YEN will move rapidly.

How to Trade AUD/JPY

To get the most out from the trading AUD/JPY trading pair you should pay attention to several factors.

For the AUD you should watch for the price change in commodities. When there is rise in the price of commodities the AUD will become stronger because they are exporting commodities and with higher price they will get more money. Therefore, the AUD will become stronger.

If the price of commodities falls down the AUD will become weaker.

For the YEN, watch is there oil price change. If the oil price starts to rise the YEN will become weaker because Japan economy depends on the oil due to their large manufacturing industry.

Also, if there is weather catastrophe, the Japan economy will suffer and the price of the YEN will weaken.

When you combine the information about commodities and the weather you can easily see where the price of the AUD/JPY trading pair will move.

How to Trade AUD/JPY – Volatility

The AUD/JPY is relatively volatile and the trader can make a good trading strategy on this pair.

While the AUD and the YEN are somewhat save heaven currencies investors like to buy or sell AUD or YEN.

Both currencies are affected by the central bank interventions and when the interest rate is changing the AUD and the YEN will move fast.

While both currencies are Asian currencies their volatility will be high during Asian trading session which will be explained in the next section of this post.

AUD/JPY Analysis – Trading Session Pip Range

Lets dive into AUD/JPY trading pair analysis to see how the pair behaves in different hour, day and month. I want to emphasize that the time of the candle price is taken out from the platform which is on GMT+1.

First chart shows how the pair is doing on the trading sessions compared to other trading pairs. I have ordered pairs on the chart to easily see which pair have the lowest and which have the highest volatility.

Trading session pip range -comparison
Trading session pip range -comparison

The AUD/JPY is the seventh trading pair with the moderate volatility in all trading sessions, which implies that the pair is the one of the medium volatile pairs among all other pairs. The AUD/JPY analysis shows us that traders do not love to much to trade it and we have moderate pip range during each session.

Read more: Forex Market Trading Session

Which Trading Session Should You Trade

If you are not bond to the time frame during each day like if you live in Australia, US, and it does not make a problem for you to trade on the London or New York trading session, then you can extract the best volatility from the market.

On Sydney and Tokyo session you will have some volatility which can be enough for almost every strategy because pip range more around 30 pips is great. Moving from Asian session to European, London, session we see small rise in the pair volatility.

The London session gives us volatility which is similar compared to the Sydney session on some days in a week. Because the AUD and JPY are world major currencies, many traders love to trade these currencies and consequently pair have higher volatility.

During the London session we have overlap with New York session which gives us more volatility because U.S. traders jumps in the market. During overlap, news on the U.S. market are published which impacts all currencies in the world.

You will see further in this post how the overlap time have impact on the pair volatility during the day.

AUD/JPY  analysis - trading session pip range
AUD/JPY analysis – trading session pip range

From this chart you should take information that the AUD/JPY analysis shows you that:

  • pair have relatively high volatility on all trading sessions
  • during overlap between Tokyo and London and New York session, the trading pair have small increase in volatility
  • starting from the Monday, volatility increases
  • volatility peak is in the middle of the week, on Wednesday
  • volatility is still high on the Friday

AUD/JPY Analysis – Daily Range

If you take a look how the overlap looks like then you understand why pip range is higher on these times. The trading session chart shows that the time between 2 trading session, the London and New York, happens between 14:00-18:00h(GMT+1).

Trading sessions
Trading sessions

How does the time overlap looks on the daily pip range, measured in hours during a day is shown on the next chart. Immediately you can see that time between 14:00-18:00 have rise in pip range which confirms above said.

Time overlap between the Sydney and London and New York trading session, news publishing, large amount of traders on the market have a result as increased pip volatility in that time.

It is not only the London and New York trading session overlap that makes a difference in pip volatility. You can see that the trading session overlap between the London and Tokyo make a change on the pair volatility.

AUD/JPY analysis - daily pip range
AUD/JPY analysis – daily pip range

AUD/JPY Analysis – London Session

The London session is known as the largest one and while the AUD and JPY are major currencies, traders like to trade them. We see increase in pip range from 09:00h up to 11:00/12:00h.

Around noon we see drop in the pip range on the London session. Mostly this is due to lunch brake in Europe, positions are set and traders relax in the next 2 hours waiting for the New York session.

AUD/JPY Analysis – New York Trading Session

Around 14:00h we see rise on the pip range and reason for this is that U.S. traders together with the Europe traders are active on the market. The AUD/JPY volatility increases due to large amount of trades.

Traders form their positions and mostly around that time news from the U.S. are published. News have high impact on this pair because the USD currency is widely connected to all other currencies. So, when the USD currency moves all other currencies also move, more or less.

Going to the end of the day you see that the pip range starts to decline, especially when the London trading session finishes (17:00h). Large amount of traders close their position, AUD/JPY volatility declines and pair is traded less.

By the end of the day the pip range is at the same level as it was on the start of the day. Sydney and Tokyo trading session takes over and another day comes.

What you should take from these two charts for your trading:

  • During a day the pair have highest volatility on the trading session overlap
  • Two trading session overlap have increase in the the pair volatility, Tokyo-London and the London-New York session
  • The best time to trade is on the Tokyo-London and London-New York trading session overlap where the pip volatility is at the highest rate
  • You should close your positions, if you are a day trader, until the London session closes to avoid later “slower” movements

AUD/JPY Analysis – Weekly Range

On the next chart I will show you how the pair is doing on the weekly basis, but not on the trading sessions. This information you can incorporate into your trading strategy when you plan to trade this pair.

AUD/JPY analysis - weekly pip range
AUD/JPY analysis – weekly pip range

Similar to the chart “AUD/JPY analysis – trading session pip range” this chart shows similar data on the pair volatility. Starting from the Monday, the pip volatility increases. This increase we can connect with waking of the market after weekend.

From the Monday to Wednesday, traders makes they trading strategy and enters into trades. Trends on the pair movement start to form. Traders looks what is pair trend, make trading plan when to enter and exit and which news will have impact on the trading pair.

These key characteristics are done over weekend before or on the start of the week. When all is done traders enters into positions and they day trade or wait several days to exit their positions.

When the pair hits Wednesday, mostly traders start to plan to exit trades. The pair volatility declines to the end of the week. On the Friday there is still volatility, higher comparing to the Monday.

On the Friday traders tend to close their positions due to weekend on which sometimes can news be published, which have high impact on the pair. So, to avoid that kind of possible problem, if news are against trader, they close their position on Friday.

Friday – Day for Profit Lock

During the Friday you could see that the price of the pair reverse against weekly trend. Reason for this is also in closing positions of the traders who takes their profit from the market.

What you should take from this chart:

  • On the Monday prepare yourself for trend forming
  • Until the Wednesday do not trade or scalp if you are scalper or day trader. Wait until highest volatility hits the pair where you can extract most out of this trading pair
  • If you are weekly or long term trader wait until the Wednesday until the trend is formed or confirmed
  • On the Friday get out from the trading pair if you are uncertain will there be any news over the weekend which could impact the trading pair volatility

AUD/JPY Analysis – Monthly Range and Pip Range History

In the next part of the blog post I will show you 12, twelve, charts which shows the AUD/JPY analysis over few decades in order to give you the best pair volatility overview.

AUD/JPY analysis - Monthly average pip range
AUD/JPY analysis – Monthly average pip range

Then monthly chart above shows that the AUD/JPY trading pair have 500 pip range on average. The difference between months is irrelevant because the average 500 pip range is consistent over all months during the year.

January

AUD/JPY analysis - January pip range

AUD/JPY analysis – January pip range

February

AUD/JPY analysis - February pip range
AUD/JPY analysis – February pip range

March

AUD/JPY analysis - March pip range
AUD/JPY analysis – March pip range

April

AUD/JPY analysis - April pip range
AUD/JPY analysis – April pip range

May

AUD/JPY analysis - May pip range

AUD/JPY analysis – May pip range

June

AUD/JPY analysis - June pip range
AUD/JPY analysis – June pip range

July

AUD/JPY analysis - July pip range
AUD/JPY analysis – July pip range

August

AUD/JPY analysis - August pip range
AUD/JPY analysis – August pip range

September

AUD/JPY analysis - September pip range
AUD/JPY analysis – September pip range

October

AUD/JPY analysis - October pip range
AUD/JPY analysis – October pip range

November

AUD/JPY analysis - November pip range
AUD/JPY analysis – November pip range

December

AUD/JPY analysis - December pip range
AUD/JPY analysis – December pip range

AUD/JPY Analysis – Monthly Conclusion

Small volatility leaves smaller opportunity for traders because it is much easier to grab some pips in over 100 daily pip range instead trading on 70 daily pip range. So, in these times you can expect that you will have lower average pip income.

This directly impact on the trading results because smaller pip movement can be hard to trade when spread or commission is to large. Sometimes opening a trade is not worth of the costs you will pay just to enter into the trade.

Smaller volatility can trick you in a way you think there is a trend but momentum slows down and you get stuck in a trade. You have less trades available or signals from your trading strategy and your strategy begins to give you less profitable trades.

What we see generally by average line on each month is that the average pip range is risingfrom 2009 and we do have increased volatility. This gives us more opportunities to catch higher number of pips but still pair has large volatility that allows us to trade it and to earn money.

What Impacts AUD/JPY Volatility

What influences these two currencies is primary their economy. One of the highest indicator that have large impact on the currency is interest rate in each country.

Mostly when interest rates are increasing price of the currency is increasing. This is called International Fisher effect.When interest rate is higher in Australia it means that AUD will rise comparing to JPY. When Japan interest rates is higher than Australia, YEN will rise comparing to AUD.

Higher interest rates means currency will attract more investors in that country where they can earn more money and currency becomes more desirable.

Connection Between Volatility and News

Countries with high level of inflation depreciate more compared to other currencies. Inflation causes the central bank to intervene in a way as adjusting interest rate to control undesired effects.

When interest rates is increasing that is good for currency so you can expect price of AUD will rise. Why does it rise – because when there is high interest rate in country it attracts more investors who can benefit on high rates.

But have in mind that the trading pair chart is not only with one currency but with two currencies. This means sometimes if interest rates is increasing for AUD it could happen that trading pair value will not increase. Reason could be that YEN is stronger even interest rate on AUD is rising, pair price could remain moving sideways or even falling.

PPI, CPI, PMI and GDP

Indicators:

  • PPI as Producer’s Price Index
    • shows trends within sale markets, manufacturing industries and commodities markets
  • CPI as Consumer Price Index
    • Consumer Price Index measures inflation that is most important indicator of the economic health of that country
  • PMI as Purchasing Managers Index
    • shows us are purchasing managers optimistic or pessimistic about the economy
  • GDP Gross Domestic Product
    • tells us how much the economy is strong, hod does it advance and is it healthy or not

These indicators have impact on the price of any currency and they are ones which you should watch. Price index is telling how the price of consumer goods and manufacturing material is doing. These prices have impact on inflation and consequently on interest rates.

GDP is overall information how country is doing and this information will have large impact on the price of currency.

I will not go more into details about these indicators but you can check for more information on the links I have gave.

AUD/JPY Analysis – What to Take From Here

As I have give a lot of information in AUD/JPY analysis there is useful information you can use in your trading.

  • Pair have average volatility and moderate movements
  • Use overlap in trading sessions, Tokyo and London and New York, to extract as much pips is possible because then you will have the highest movement
  • During a week choose to trade on the middle of the week, Wednesday and Thursday because then you have the best volatility and chance to grab pips from the market
  • Watch for Friday – lock the profits you have to avoid impact from weekend news if there is any
  • Watch out on published news and indicators that have large impact on the currency

DOWNLOAD

Read more:

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  5. EUR/JPY Pip Range Analysis – Euro Japan Samurai
  6. EUR/CHF Analysis-The Biggest Crash in the Forex History
  7. USD/CAD Pip Range Analysis – Oil UP Pair DOWN
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  9. USD/CHF Pip Range Analysis – Swissie
  10. AUD/USD Pip Range Analysis
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  12. NZD/USD Pip Range Analysis


Frano Grgić

Frano Grgić

A Forex trader since 2009. I like to share my knowledge and I like to analyze the markets. My goal is to have a website which will be the first choice for traders and beginners.

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