AUDJPY: Resistance of 96.50 Turns Into Support
The daily candle chart below shows the price history of the Australian Dollar (AUD) versus the Japanese Yen (JPY). This pair is known as AUDJPY, and is trading around 96.69 around time of publication today.
Last week the AUDJPY was reviewed in the Ideas You Can Trade series, and was described as imminently about to reach under 96.50 for the third time this year.
Shortly after that post the pair continued its bullish momentum with a breakout to the upside of 96.50 and reached a new year to date high of 97.09 yesterday before returning back towards current levels where 96.50 is now acting as support.
If the area around 96.50 can hold, then a continuation of the uptrend could resume, whereas if this level is breached again the bearish pullback could continue lower.
Below are examples of how to trade a bullish continuation or a bearish reversal:
1. BULLISH BUY ENTRY ORDER: Create a “Buy Entry Stop” @ 96.99 with a Limit to take profit @ 97.19 and a stop-loss @ 96.79 Risk/Reward Summary: Limit risk = +20 pips profit / (-20) Stop-loss risk = Gain to Loss ratio = 1.00
2. BEARISH SELL ENTRY ORDER: Create a “Sell Entry Stop” @ 96.40 with a Limit to take profit @ 96.09 and a stop-loss @ 96.61 Risk/Reward Summary: Limit risk = +31 pips profit / (-21) Stop-loss risk = Gain to Loss Ratio = 1.47
Medium Term Daily Candle Chart: