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Forex: Ideas You Can Trade - AUDJPY Triple Top Formation Imminent

Posted by Steven Hatzakis on Aug 21, 2014 6:53:00 AM

AUDJPY: Static Resistance Under 96.50 Approaching

The daily candle chart below shows the price history of the Australian Dollar (AUD) versus the Japanese Yen (JPY), known as AUDJPY, and trading around 96.34 around time of publication today.

Since the bullish momentum that began at the start of 2014 was halted in April near the high of 96.48, and then again in July at 96.47, a third attempt at this ceiling appears imminent at barely 14 pips away. If resistance near 96.50 holds, a triple-top would mean that the bullish trend would reverse on that line and head back lower.  Whereas is 96.50 is broken to the upside a bullish continuation should follow. 

Last time this pair was reviewed in the Ideas You Can Trade series, in June, the resistance expected near 96.50 was predicted and had since followed, with the 2nd top made shortly thereafter in July. Accordingly, traders will be looking at 96.50 to see whether a breakout or reversal happens, in order to gauge expected market direction for AUDJPY over the very short term.  

Below are examples of how to trade a bullish continuation or a bearish reversal:

1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 96.52 with a Limit to take profit @ 96.89 and a stop-loss @ 90.29 Risk/Reward Summary:  Limit risk = +37 pips profit / (-23) Stop-loss risk = Gain to Loss ratio =  1.60

2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 95.93 with a Limit to take profit @ 95.58 and a stop-loss @ 96.28 Risk/Reward Summary:  Limit risk = +35 pips profit / (-30) Stop-loss risk = Gain to Loss Ratio =  1.16

Medium Term Daily Candle Chart:

audjpydaily august 21 2014 note

Topics: YEN, Aussie Yen, forex trading, technical analysis, aussie, Japanese Yen, AUDJPY, Australian Dollar


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