We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bullish
Wall Street
Mixed
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Always a pleasure chatting with @JeremyNaylor_IG @IGTV ...Thanks https://t.co/PzZ75iqeG4
  • 🇪🇺 EUR Euro-Zone Retail Sales (YoY) (FEB), Actual: 3.0% Expected: 1.7% Previous: 2.2% https://www.dailyfx.com/economic-calendar#2020-04-03
  • LIVE IN 30 MIN: Strategist @PaulRobinsonFX will run through his favorite charts and potential set-ups for the week ahead in the FX and CFDs market here - https://www.dailyfx.com/webinars/108721147?CHID=9&QPID=917702&utm_source=Twitter&utm_medium=Dubrovsky&utm_campaign=twr
  • Heads Up:🇪🇺 EUR Euro-Zone Retail Sales (YoY) (FEB) due at 09:00 GMT (15min), Actual: N/A Expected: 1.7% Previous: 1.7% https://www.dailyfx.com/economic-calendar#2020-04-03
  • Join @PaulRobinsonFX 's #webinar at 5:30 AM ET/9:30 AM GMT as he goes over London #FX & #CFD charts for the next week. Register here: https://t.co/CoMkMA0pdF https://t.co/8Wyy20WdNj
  • The $USD fell as an improvement in sentiment slowed aggressive capital outflows from emerging markets and #ASEAN economies. What do USD/SGD, USD/MYR, USD/IDR and USD/PHP face next? Find out from @ddubrovskyFX here: https://t.co/3SQYf5Y0Vx https://t.co/aEDOjS4CqZ
  • EUR Eurozone Final March PMI Actual: 26.4 Previous: 28.4 Composite: 29.7 Previous: 31.4
  • Russia is unlikely to agree to production cuts if the US does not participate, according to sources
  • EUR Germany Final March PMI Services: Actual: 31.7 Prelim: 34.5 Composite: Actual: 35.0 Prelim: 37.2
  • OPEC+ Alliance are set to debate on at least a 6mbpd cut, according to sources
A Very Selective Short Opportunity in AUD/JPY

A Very Selective Short Opportunity in AUD/JPY

2014-03-03 18:05:00
Kaye Lee, Head Forex Trading Instructor
Share:

Talking Points:

  • "Suspicious" Downtrend in AUD/JPY
  • Consolidation Following Recent Gap Down
  • How to Mitigate Risk When Shorting AUD/JPY

Markets have been left largely in disarray with weekend gaps further muddying the waters after a very fast-paced Friday session. As a result, today's trades are likely to be lower probability in nature, and there are no clear shots to be taken on any of the hourly charts. Nonetheless, AUDJPY may present a short opportunity later in the trading day on the 15-minute chart.

The four-hour chart of AUDJPY (see below) shows a somewhat suspicious downtrend in progress. It is worrisome because of a relatively sharp rise on the daily chart of late, which suggests choppy price motion ahead. Nonetheless, this trend should prove sufficiently robust to support a 15-minute trade.

Guest Commentary: Apparent Downtrend in AUD/JPY

An apparent downtrend on the 4-hour chart of AUD/JPY is somewhat suspicious due to a relatively sharp recent rise on the daily chart.

On the below hourly chart, price has been consolidating sideways ever since the gap down, and AUDJPY could well try to close the gap in early-Monday trading before continuing down. Should this happen, resistance in the form of the declining trend line will be met. This, in conjunction with several horizontal levels, gives a resistance zone between 90.79 and 91.04.

Guest Commentary: Gap in Play on Hourly Chart of AUD/JPY

AUD/JPY could soon fill a recent gap on the hourly chart before heading back lower off of a narrow overhead resistance zone.

This zone is merely 25 pips deep, which represents extremely small pip risk. That’s appropriate for a day where choppiness is likely to reign. Conservative traders might even be well-advised to take half the usual risk in calculating a position size.

Nonetheless, the best entry for this trade is on the 15-minute chart (see below).

Traders will readily note the choppy price action on this time frame, and some may fear that AUDJPY may even fail to rise as far as the key overhead resistance zone. However, it is far preferable to be unable to trade in this environment than to set a resistance zone that is too close to price and can easily be stopped out.

Guest Commentary: The Ideal Time Frame for Selling AUD/JPY

Utilizing the 15-minute chart and a narrow zone of risk helps mitigate risk when shorting AUD/JPY in the prevailing choppy conditions.

If AUDJPY does manage to reach the designated area, two or three attempts can be made to get in on a short trade, which will have nearly 75 pips to run (or perhaps even more, depending on the trigger) just to reach the previous low. This will provide decent risk profile and sufficient justification for taking the trade.

Viable trade triggers would include the usual suspects: pin bars, bearish engulfing patterns, or bearish reversal divergence on the 15-minute chart of AUDJPY.

By Kaye Lee, private fund trader and head trader consultant, StraightTalkTrading.com

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

DISCLOSURES

News & Analysis at your fingertips.