AUD/JPY Technical Analysis: Pending Short After Trade Talks
AUD/JPY TECHNINICAL STRATEGY: PENDING SHORT
- Looking to go short AUD/JPY after trade war talks conclude
- AUD/JPY looking to maybe re-test December resistance line?
- Waiting for re-test with confirmation of downtrend to go short
AUD/JPY has been on a downtrend for over a month and has been consistently trading below or within the range of the December resistance. Waiting for the pair to re-test the price range and confirm the downtrend before considering entering a short position might be a prudent approach to protect against potential counter-trend swings.
This certainly is a possibility, considering the upcoming trade talks between Beijing and Washington that are set to take place on Monday, January 7. If the negotiations go well and progress on the trade war front is made, risk-on sentiment will likely push the pair up, potentially reaching and/or closing above resistance.
AUD/JPY – Daily Chart
If the pair break above the resistance, the next possible price obstacle will be between the 78.691-79.055 range. Conversely, if the outcome sours market sentiment, the pair will likely decline and continue along the downward trend.
If the pair re-test and close below the resistance, that validation will confirm the strength of the pair’s downward momentum. This would in turn allow for an opportunity to go short with possibly comparatively less risk of a trend-reversal in the near-term.
AUD/JPY TRADING RESOURCES
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--- Written by Dimitri Zabelin, Jr Currency Analyst for DailyFX.com
To contact Dimitri, use the comments section below or @ZabelinDimitri on Twitter
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.