Market Condition: AUD/JPY Daily Retracement
Target 1: 2x ATR 380 Pips
Target 2: Descending Channel Support
Invalidation: 1X Daily ATR Move Over Resistance
(Created using Marketscope 2.0 Charts)
The AUD/JPY is currently bouncing from support in a descending price channel. With SSI being extreme, reading at +3.70, traders may look for opportunities to sell the pair as it retraces to resistance. Currently, channel resistance is found near 82.50. With the Aussie Dollar advancing against the Yen traders may elect to set entry orders to sell the market, or chose to trade at market as prices approach resistance.
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Current daily ATR for the AUD/JPY reads at 190 pips. Traders looking to manage risk may set a 1X ATR stop outside of the descending channel. ATR may also be used as preliminary pricing targets, with a 2X ATR target looking for a minimum of 380 pips. Traders looking for a longer term position may consider a move to channel support as a final target.
In the event that prices fail to retrace to resistance, any entry orders to sell the AUD/JPY may deleted. At which point, traders may consider trading a breakout under the June 2016 low at 72.43
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