Daily Price Action

AUDJPY Shorts Favored Below 93.0


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I hope everyone came out unscathed after yesterday’s back to back event risk in the form of FOMC and RBNZ. The GBPNZD trade setup that we covered on January 26th certainly benefited from both events, rallying 430 pips on the day.

Moving on to today’s setup. This is one that I traded short last week after the false break of trend line resistance. I ended up covering my position at 93.60 for an aggregate 16R after pyramiding. The pair I’m referring to is AUDJPY.

This market is back on my radar as it cleared the 93.0 area yesterday with a bearish engulfing/rejection bar. This area is defined by a key horizontal level as well as a weekly trend line dating back to August of 2013.

AUDJPY weekly chart:

AUDJPY weekly forex chart

Looking lower, the first level of support comes in around 91.75. That said, given the break of the 2013 trend line, a strong case could be made for a long-term target of 86.35 in the weeks ahead.

Summary: Opportunity to trade today’s bearish rejection/engulfing bar. The 93.0 level should now act as resistance. A close above this level would invalidate the short setup. First key level comes in at 91.75 with a potential long-term target of 86.35.

AUDJPY daily forex chart

NZDUSD analysis

NZDUSD monthly forex chart

USDJPY analysis

USDJPY 4 hour forex chart

Leave a Comment:

Slamets says

Hi Justin.
When / in what condition we should change initial 2R reward to a bigger ratio? Thanks in advance.
BTW even your free resource give me a lot of change in a good way in FX trading. Thank you 🙂

    Justin Bennett says

    Hi Slamets,

    I’m glad you’re enjoying the free content. There isn’t one specific rule that dictates when you should go for a larger R-multiple. It really just depends on the levels involved in the setup and how significant the break is.

    For example if a market breaks a pattern that has been in place for 2 or 3 years, you can speculate that the resulting move will be more substantial than it would be for a pattern that has been in place for 2 or 3 weeks.

    I hope that helps.



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