Hello everyone!

Last weekend I posted a Trade Plan where I stated that we shouldn’t get carried away with the yen pairs strength because a reversal of this magnitude (remember that the yen pairs had been falling for 2 straight months) wouldn’t come overnight.

I also stated that I was expecting a double bottom as a confirmation to start looking at reasons to buy these pairs.

So, this week provided exactly what was predicted and we now have more confidence to begin to think about a reversal on the pairs.

Warning: this will be a busy week for the Aussie and Kiwi as we will have the RBA Minutes (Tuesday), Australia Unemployment (Thursday) and RBNZ Interest Rate Decision (Wednesday). With this much news, caution is advised on those days.

Let’s look at the technicals:

AUD/JPY - Daily

We got a double bottom on a key level of support based on historical price action, which we were anticipating to support our “thesis” that we want to see the yen pairs get strong again.

AUD/JPY - H4

Bulls will be entering long at WM2 (81.73) with a target of WM4 (84.52), whilst Bears will have to wait for a better setup which could be selling at WPP (82.66) with a target of WS2 (79.87). Personally, I’d like to see price to consolidate at the current level before rallying again, but we’ll just have to wait to see how things unfold.

NZD/JPY - Daily

There’s a double bottom in formation on a key level of support based on historical price action, which we were anticipating to support our “thesis” that we want to see the yen pairs get stronger again.

NZD/JPY - H4

Bulls will be entering long at WM2 (76.45) with a target of WM4 (78.63), whilst Bears will have to wait for a better setup which could be selling at WPP (76.16) with a target of WS2 (74.99). Personally, I’d like to see price to consolidate at the current level before rallying again, but we’ll just have to wait to see how things unfold.

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