AUDJPY: Horizontal Resistance Met on October 22nd and 23rd of Last Year, Reached Again
The daily candle chart below shows the price history of the Australian Dollar (AUD) versus the Japanese (JPY) over the past 12 months and trading at 95.65 (as of publication) today, and for the first time since last October as resistance near current levels has been reached.
This pair is known by the AUDJPY symbol, also known as Aussie-Yen, and traded higher in today's session and just off highs for the day, of 95.71, on the last day of the first quarter of 2014.
Last time the pair was covered in this series, in December 2013, the expectation was for a bearish continuation, whereas now the pair is looking quite bullish after reaching current levels for the for time since last October, nearly 6 months ago.
Considering the 95.65 is a practical resistance line, and the level where the pair is trading around time of publication today, all eyes will be on whether or not this price can withstand the trading pressure.
If resistance remains on this line, and holds, then AUDJPY should retreat abruptly, indicating a reversal of the uptrend.
If resistance fails, and AUDJPY can hold above this price or near 96.00 then a higher-high and continued bullish momentum may follow.
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 96.01 with a Limit to take profit @ 96.31 and a stop-loss @ 95.78 Risk/Reward Summary: Limit risk = +30 pips profit / (-23) Stop-loss risk = Gain to Loss ratio = 1.30
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 94.37 with a Limit to take profit @ 94.01 and a stop-loss @ 94.69 Risk/Reward Summary: Limit risk = +36 pips profit / (-32) Stop-loss risk = Gain to Loss Ratio = 1.12
Medium Term Chart: