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.
The yen pairs have been under quite a lot of pressure recently.
Even the USDJPY faltered in May, losing about 200 pips as of this writing.
EURJPY is another one I pointed out recently.
After falling below 122.65 on a daily closing basis on May 23rd, the pair encountered sellers here on Friday and Monday.
I even wrote about the consecutive inside bars yesterday.
Anytime you start to see yen pairs unwinding across the board, it’s a good idea to look where else you might be able to take advantage of any weakness.
One such pair is AUDJPY.
Since May 16th, the risk-sensitive AUDJPY has been hovering above key support at 75.40.
Why is the market paying attention to 75.40, you ask?
Remember what just happened to EURJPY?
As soon as EURJPY closed below the January 3rd flash crash close at 122.65, the area started to serve as new resistance.
Well, guess where that same January 3rd close is on AUDJPY.
If you said 75.40, you’re right.
The AUDJPY is acting similar to EURJPY in the sense that it’s using that January 3rd close as a key support level.
That means 75.40 on AUDJPY is our breakout point.
If sellers manage a daily close below it, we will likely see AUDJPY trend lower toward the year-to-date low at 72.75.
And judging by the price action in the second half of May, I would say a breakdown isn’t far away.
Notice how AUDJPY has carved lower highs into the 75.40 support level.
That’s a sign that sellers are still winning the battle.
Just keep in mind that the pair is prone to bouncing as long as 75.40 is intact as support on a daily closing basis.
But if it fails, AUDJPY could be on its way to carving new 2019 lows.
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