The Weekly Update: Aussie Yen Technical Play

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AUDJPY Trading Strategy

We have been closely monitoring the Australian Dollar (AUD) following the recent weakness in the Forex market. While the entry in AUDUSD is still unclear as the pair has yet to obtain its monthly objective of the top Head-And-Shoulders (H&S) on the monthly chart that we have previously discussed, AUDJPY may have provided a technical entry on the monthly chart that may be combined with the weekly chart.

AUDJPY Monthly Chart

Please click on the chart to enlarge:

AUDJPY Monthly Chart 06/09/15

AUDJPY Monthly Chart 06/09/15

As you may see from the monthly chart AUDJPY corrective weakness may have reached a firm support level.  The range can easily be derived by using the monthly resistance (in black), which suggests temporary gains on a monthly level.  Although the Aussie yen may trade as high as 88.77 we are uncertain the technical target will be met by the market as we are far from the monthly close. Our last decision to wait for the weekly close in crude oil and the indices was rejected by the market as a moderate recovery was seen throughout the week that prevented us from entering the market.

The monthly chart demands a stop below 79.60, which we are not opting for. The stop will be placed below 81.48, which is the nearest support level. The reason being is due to the fact we have noticed the price is being wedged on the 4hr chart, which is an early indication the price is due to correct higher. We would prefer AUDJPY will gap lower at the opening of the Forex market as it would reduce the size of the protective stop and increase the take profit.

AUDJPY 4hr Chart

Please click on the chart to enlarge:

AUDJPY 4hr Chart 06/09/15

AUDJPY 4hr Chart 06/09/15

There are many fundamental events that may trigger the rally in AUDJPY, ranging from the Reserve Bank of Australia (RBA) monetary policy statement to the Bank of Japan (BOJ) press conference that are both due next week. The key event for September is the upcoming Greek elections but we would expect AUDJPY to correct higher ahead of the elections.  Holding a long trade in AUDJPY means we will enjoy positive interest at the rollover.

We will use 88.70 as our target for the long trade but will pay close attention to 86.60 and see whether it acts a strong resistance if it will be tested by the market on the 4hr chart.

AUDJPY Trade Alert Details

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AUDJPY Current 4hr Chart 06/09/15

AUDJPY Current 4hr Chart 06/09/15

Entry: Market price (82.27)
Take profit: 88.77
Protective stop: 80.95
Risk Ratio (RR): 1 : 3.6 (approx.)
Estimated duration: 60 days

If AUDJPY will not post strong gains within the next 60 days we are uncertain our target will be met, hence the relatively short estimated duration.

07/09/15 UPDATE: AUDJPY is trading at 82.68  at the time of this writing.

Please click on the chart to enlarge:

AUDJPY 4hr Chart 07/09/15

AUDJPY 4hr Chart 07/09/15

Although this is a relatively small profit we are closing 10% of the long trade at market price.

08/09/15 UPDATE: AUDJPY is trading at 83.13 at the time of this writing.

Please click on the char to enlarge:

AUDJPY 4hr Chart 08/09/15

AUDJPY 4hr Chart 08/09/15

The price is flirting with the upper resistance of the wedge, which is why are choosing to close 10% of the long trade at market price, 83.13.

Not long after the trade update was issued AUDJPY spiked higher, trading at 83.56 at the time of this writing.

08/09/15 UPDATE III: Once the resistance gave way moderate gains were noted in AUDJPY, trading at 83.90 at the time of this writing.

Please click on the chart to enlarge:

AUDJPY 4hr Chart II 08/09/15

AUDJPY 4hr Chart II 08/09/15

Although this was a difficult decision to make we have decided to close 20% of the long trade at market price.

08/09/15 UPDATE IV: AUDJPY is trading at 84.25 at the time of this writing. We are shifting the protective stop to 82.40.

09/09/15 UPDATE:  AUDJPY is trading at 85.03 at the time of this writing. We may have underestimated the strength of the reversal when we set a 60 days duration for the long trade.

Please click on the chart to enlarge:

AUDJPY 4hr Chart 09/09/15

AUDJPY 4hr Chart 09/09/15

We are closing 10% of the long trade at market price and shift the protective stop to 83.20.

10/09/15 UPDATE:  We are fairly pleased with the progress of AUDJPY.

Please click on the chart to enlarge:

AUDJPY 4hr Chart 10/09/15

AUDJPY 4hr Chart 10/09/15

We are closing 10% of the long trade at market price and shift the protective stop to 83.90. AUDJPY is trading at 85.59 at the time of this writing.

13/09/15 UPDATE:  AUDJPY is trading at 85.37 at the time of this writing. The RBA monetary policy minutes is one of the key events we mentioned last week when we took the long trade.

Please click on the chart to enlarge:

AUDJPY 4hr Chart 13/09/15

AUDJPY 4hr Chart 13/09/15

We are closing 10% of the long trade at market price and shift the protective stop to 84.46.

16/09/15 UPDATE: AUDJPY is trading at 85.83 at the time of this writing. The main concern for AUDJPY is that if the Fed does not hike rates on Thursday the US Dollar will be heavily sold including USDJPY, which may result in moderate selling in AUDJPY.

Please click on the chart to enlarge:

AUDJPY 4hr Chart 16/09/15

AUDJPY 4hr Chart 16/09/15

We have finished the trade with a decent profit and enjoyed positive interest for duration the trade was held onto.

The Weekly Update: Aussie Yen Technical Play

As AUDJPY long trade is closed this page can  now be accessed by all traders. Open trades are restricted to members only. We have been providing trade alerts in the Forex market since May 2014.
The Weekly Update: Aussie Yen Technical Play

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The Weekly Update: Aussie Yen Technical Play

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The Weekly Update: Aussie Yen Technical Play