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Bearish AUD/JPY, Update on AUD/NZD Short

Bearish AUD/JPY, Update on AUD/NZD Short

Paul Robinson, Strategist

Equity market weakness has given life to the Japanese yen, and with it JPY-crosses have been under pressure. The theme looks set to continue, and today I’ll highlight one of the more attractive opportunities given where it currently lies on the chart. Additionally, we’ll re-examine the AUD/NZD short idea put out a couple of months back as it finally extends lower towards the target.

For in-depth fundamental and technical analysis for your favorite market or currency, check out the newly released DailyFX Q2 Forecasts.

AUD/JPY at resistance, has 400+ pip potential

AUD/JPY has been working its way higher in recent trade, but in doing so it is taking on a bear-flag pattern (most visible on the 4-hr time-frame). On the daily there is a confluence of resistance between price running back to lows created a year-ago and a trend-line running down off the January high.

A stop placed at 82.68 above recent swing highs should allow sufficient room for shorts to work out. The targeted end-zone is a good distance lower at the U.S. election spike-day low of 7678 down to 7616. Along the way profitable swing-trades can be scaled out of, while traders looking to trade much shorter-term time-frames can use the 4-hr chart to identify set-ups along the path of least resistance until the end objective is met. For example, the first set-up could be the bear-flag once broken.

The initial entry (at market) to stop is a little over 110 pips, while the end target is over 450 pips lower, providing a 1:4+ risk/reward profile.

AUD/JPY Daily Chart (at resistance)

AUD/JPY daily chart, at resistance

AUD/JPY 4-hr Chart (bear flag)

AUD/JPY 4-hr chart with bear-flag

To see where our analysts see the Australian Dollar heading this quarter, check out the DailyFX Q2 Forecast

AUD/NZD Trade Update – Nearing initial target

AUD/NZD has taken it’s sweet ole time trading lower, but the short initiated from the break of the ‘head-and-shoulders’ formation is finally nearing the initial target at the April 2015 trend-line. The thinking on this end is to give it a little room to see if it can’t first break, to possibly extend the trade, but should buyers show up, then booking profits will be prudent.

AUD/NZD Daily Chart (nearing target)

AUDNZD daily chart, nearing target

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Whether you are a new or an experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.