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Important: This site uses New York Close Forex Charts so that each 24-hour session starts and ends at 5 pm EST. These charts are essential for trading price action.
I wrote about the AUDJPY last Wednesday.
The idea was quite simple: wait for a close below the short-term range support at 75.40 followed by a retest of the area as new resistance.
Step one was a close below 75.40, which Friday did without hesitation.
The second step was a retest of the 75.40 region as new resistance.
That’s occurring as I type this post.
But so far, we don’t have a reason to think 75.40 will hold as resistance. Sellers are doing their part up to this point, but will it continue?
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We never know where a market is going.
However, we can use the clues it offers to determine what is likely.
One clue I use in every situation is the daily close at 5 pm EST.
If today closes the day below 75.40, the idea is intact. It would also give me a bit more confidence in my bearish outlook for AUDJPY.
That said, there are a few upcoming events that could decide the outcome here.
First up are retail sales at 9:30 pm EST. That’s just a few hours into Tuesday’s session that begins at 5 pm EST.
The second set of events include an RBA rate decision and statement at 12:30 am EST on Tuesday, followed by a presser five hours later.
As you can tell, the next 24 hours promise to be action-packed for a pair like AUDJPY.
I have no interest in trading the pair until I see where today closes. If it closes back above 75.40, there’s nothing more to discuss.
If it stays below 75.40, I will continue to look for a favorable short entry for a move to that key support zone around 73.00.
I’m in no hurry to add a black mark to a run like that.
Justin Bennett is an internationally recognized Forex trader with 10+ years of experience. He's been interviewed by Stocks & Commodities Magazine as a featured trader for the month and is mentioned weekly by Forex Factory next to publications from CNN and Bloomberg. Justin created Daily Price Action in 2014 and has since grown the monthly readership to over 100,000 Forex traders and has personally mentored more than 3,000 students.Read more...
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