AUDJPY is a pair I haven’t mentioned in quite a while. Like the other yen crosses, the price action has been more choppy than I like to see.
However, last Tuesday’s session appears to have disrupted the string of higher lows following the momentous Brexit vote on June 24th. And while a trend line with just one touch is by no means substantial, the price action since last Tuesday’s break has thus far respected the level as new resistance on a daily closing basis.
With that said, taking on fresh Japanese yen exposure ahead of the upcoming BoJ decision is a risky endeavor, to say the least. Therefore, it would be prudent to wait for the dust to settle following the Wednesday presser (along with the subsequent FOMC decision) before considering a position here.
Given the downtrend that has been in place since November of 2014, I’m only interested in selling opportunities going forward. In fact, this line of thinking can be applied to all yen pairs as bearish momentum is intact across the board.
A daily close below the 76.00 handle would open the door for a retest of the July 6th low at 74.52 with a break there exposing the post-Brexit low at 72.45. Note that due to the extreme volatility we saw on June 24th, this level will vary depending on your broker.
Alternatively, a daily close above the trend line shown in the chart below would negate the bearish bias and expose recent highs near 78.70.
Want to see how we are trading this setup? Click here to get lifetime access.