In a nutshell, I’m net short the Yen and like yesterday, I shall be actively looking for buy opportunities in this pair. To begin with, we notice that this pair is generally stuck within a consolidation that began in early 2016 and continues till now. This therefore means there weren’t much meat to feed off trend traders. What’s important at the moment though is that shift of momentum and as it is, there is a stochastic buy signal and a couple of higher highs confirming buy pressure. Notice that last week was generally bullish meaning if we look for stochastic buy signal in lower time frames, we might as well turn in a profit. Potential targets if this trade plan materializes is that previous support trend line now resistance at 89 or thereabout.
A level deeper and what interests me is the technical developments in the 1HR chart. There is nothing much going on in the 4HR chart besides the obvious bullish trend and a potential double bar bullish reversal pattern the moment this candlestick closes. In the 1HR chart, we can easily see that bullish divergence pattern and that’s not all, there is a stochastic buy signal turning from deep the oversold territory complete with bullish candlestick confirming this move. Because of this, aggressive traders can consider going long at 83.50-when there is a considerable break above that minor resistance trend line with stops at 83.
This will be my AUDJPY trade plan:
Buy Stop: 83.50
Stop Loss: 83
Take Profit: 90
Have a good trading day and of course, let me know what you think!!