AUDJPY: After a low of 94.69 today the pair is languishing around the 95.00 level
The daily candle chart below shows the price history of the Australian Dollar (AUD) versus the Japanese (JPY), known as AUDJPY, and trading near 95.01 around time of publication today.
The pair had recovered off session lows of 94.69 earlier today, after trading down sharply over the last two days we resistance was encountered under 96.00 yesterday.
Since the last time AUDJPY was covered in this series, when it was testing resistance at 95.65 and on its way higher, at the end of March 2014, and since moved higher - yet resistance encountered near 96.50 in the beginning of April reversed the trend and AUDJPY has made two lower-highs (a total of three), yesterday's included.
A bullish trend line drawn from January's low, connecting March's low, intersects the low reached so far in May, and that lines trajectory was challenged today (see blue trend line on chart below).
If this bullish trend line can hold -- then upwards momentum should follow, whereas if it fails then the bearish-turning momentum since April's high may gain more traction and push AUDJPY lower.
Below are examples of how to trade a bearish continuation or a bullish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 96.11 with a Limit to take profit @ 96.51 and a stop-loss @ 95.70 Risk/Reward Summary: Limit risk = +41 pips profit / (-40) Stop-loss risk = Gain to Loss ratio = 1.02
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 94.59 with a Limit to take profit @ 94.19 and a stop-loss @ 94.99 Risk/Reward Summary: Limit risk = +40 pips profit / (-40) Stop-loss risk = Gain to Loss Ratio = 1.00
Medium Term Chart: