AUDJPY: Swift Failure Points to May Lows
- AUDJPY fails to break above recent range, reversed hard off 4/7 low
- Engulfing bar (with daily close confirmation) further validates failure
- Targeting low-end of range created during May
During the past two sessions AUDJPY attempted to break above a range it has been stuck in for much of May. The result, though, was another rejection at the April 7 low during the Asian session, with the cross now pushing back inside the multi-week range between 78.17 and 80.64. Today’s daily bearish bar is engulfing all of yesterday’s price action in the process, adding further to the case for lower prices.
Looking to wait for a retracement following a confirmed daily close below yesterday’s low at 79.70. Shorting in the 80 region with a stop above today’s high of 80.78 and a target back towards the low-end of the range near 78 will offer up a ~1:2 risk/reward ratio.
Given the consolidation (range) is coming amidst a broader downtrend the likelihood of seeing a breakdown below the May low is high, but for now we will focus on the 'range-trade' in place and go from there.
Parameters/Levels to Watch
Entry: On bounce to at least the 80 level
Stop: Above today’s high of 80.78 (80.90 to account for wiggle room)
Target: Low 78s
---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter @PaulRobinsonFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.