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Today’s Trading Edge: AUD/JPY continues to climb to approach key trendline resistance

Posted by Edward Moya on Oct 1, 2015 11:25:27 AM

Despite overall commodity currency weakness this summer, the Australian dollar is finding key support from the 82.00 handle against the Japanese yen. The AUD/JPY shows that the recent bearish trend almost formed a major bullish butterfly pattern around the 81.00 region.

Since making a major low at 82.02 on August 24th, price has made a couple higher lows and higher highs. Key resistance has come from the 50-day SMA, which currently trades around the 87.48 level. The yen rallied after Bloomberg reported that the Bank of Japan decided that it see little need to increase its stimulus, but those gains were limited here as commodity currencies across the board staged a decent rally.

If we see price continue to make higher highs, key resistance may come from 90.00 handle. It is around that area that a bearish Butterfly pattern may emerge. If the bullish move stalls, key support will remain the 81.50 zone.

The trade: Buy AUD/JPY at 84.50, with a stop loss at 83.50 and take profit at 88.50. The risk/reward ratio is 1:4

Edward J. Moya

Senior Market Strategist

WorldWideMarkets Online Trading

Topics: AUDUSD, Aussie Yen, AUDJPY

 

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