Hello those who enjoy reading my daily trend analysis. Let me today come back to my prediction regarding aud/jpy pair. If you remember I said that I expected it to rise as it had reached some support level and bounced of it. Unfortunately it did not happen. Now, what do you do if the move does not continue and you are not able to follow the price in the direction you expected it to go? Well, you just go the other direction. How? By trading a reversal and a breakout of support or resistance (in this case support).
So, if you look at the chart I gave yesterday and compare it with today’s you see what I mean. Our prediction can never be one hundred percent right. We should always have plan B, C and maybe even D and E. If you see a pair bouncing from support it does not mean that it can do it for a long time. A breakout downwards can be very soon. That’s what happened today. The pair just plunged through support and that’s it.
So, one could simply place a short order below the support level that is indicated in the chart and go together with the market if the breakout is not false (and it was not). The pair is at intermediary support now, but will probably go lower to another support level, which is at 77.00. I really expect the security to find its’ bottom there, reverse and go up again. Why? Because I expect commodities to go up and this means that Australian, Canadian and maybe New Zealand dollar pairs will continue going up against other currencies. Hope I am right.
See you tomorrow.
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Disclaimer
Trading financial markets carries a high level of risk, and may not be suitable for all investors. All information on the blog is of educational nature and cannot be considered as advice, recommendation or signals to trade in any financial markets.