This week the Japanese Yen showed continued weakness across a number of currencies. The rise in price in Australian commodities strengthened its value which subsequently saw the AUDJPY rally for 5 consecutive days.
AUDJPY Technical Analysis
As you can see from the chart, this strong week long rally has brought price up in to a strong supply area. Price consolidated around this price area in the middle of March before selling off strongly. Logic suggests that as we re-enter this zone we should pick up some awaiting sell orders which will cause momentum to reverse and price to retrace.
Price overall is in an uptrend, but this opportunity to pick up pips in a counter-trend should yield good results.
The Relative Strength Index is showing over bought conditions adding further weight to our short trade setup.
The market is about to close shortly, therefore entries should be looked for at market open on Sunday. If price is still in this area or has gapped up then this is our signal to short.
Stops above the supply area at around 87.55 should keep us in the trade if the market attempts a short squeeze. With reference to profit targets 85.05 is a prime price in which to switch the trade and go long. This gives is ideal conditions to hit the market both ways in the coming week.
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