AUD/JPY: trade idea

The USDX seems to be stalling a bit ahead of all the scheduled US sensitive data for this week and this may set up for better trading opportunities in some of the cross pairs. One pair coming back into focus for me now is the A/J.

The A/J has essentially chopped sideways for the last couple of weeks but has suffered a bit of a fall this week. There has been a TC ‘short’ signal trying to build here but this hasn’t become valid on the 4hr Cloud chart yet. Price is also getting back down near the major 96 S/R level which could become significant:

A/J 4hr: showing price dip back towards the key 96 S/R level:

AJ4

A/J monthly: The importance of the 96 level is easy to see on the monthly chart. Any new close and hold below this level might suggest a trip down to, at least, the triangle trend line. This support is almost 500 pips away! This region is also near the weekly 200 EMA and the bottom of the weekly Ichimoku Cloud.

AJmonthly

A/J 4hr Cloud: Price has yet to close and hold below the 4hr Cloud though but any success here would support a new short trade. Personally, I would want to see the 96 support give way first though:

AJ4hrCloud

A/J daily Cloud: Price is already below the daily Cloud and this helps to support a short trade. With a new 4hr TC signal trying to form, any new close and hold below the 4hr Cloud and with a hold below the daily Cloud then…..this is called….Confluence! Price is well above the monthly Cloud and is above the weekly Cloud so there is room to fall here.

AJdailyCloud

A/J weekly Cloud: the bottom of the weekly Cloud is just above the monthly triangle support trend line and may offer some support as well.

AJweeklyCloud

 Summary:

A new TC signal to short the A/J has been trying to build over recent 4 hr candles but I am waiting to see if price can close and hold below:

  • the 4hr Cloud and, then,
  • the 96 S/R level.

Any new close and hold below the 96 level may offer up to 500 pips worth of movement down to the monthly chart’s triangle support trend line. The bottom of the weekly Cloud and the weekly 200 EMA are potential road vlocks just ahead of this triangle trend line target though.

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