Possible breakout in aud/jpy may cause it to continue upward trend

If you followed my recent posts you remember that I talked about possibility of gbp/usd and gbp/jpy pairs reversal near their important support levels. That is exactly what has been happening these couple of days. Support held and the pairs are going up. I am not sure whether it will continue for a long time, but I expect a pretty strong resistance at 123.00 level for gbp/jpy and 1.5700 level for gbp/usd. 

On the other hand I look at aud/jpy daily chart and see that the security has been ranging between 80.50 and 77.00 levels for some time and forming upward pressure makes me think that there will be a breakout upwards and the pair will resume its’ upward trend. It is at resistance now and in case of breakout the next resistance level would be 82.00-83.00 area. 

Since all important data from Australia came yesterday I do not see anything from fundamental point to stop the rise of the pair. So, buying point of the pair can be anything above its’ present level. Of course, one has to remember that the pair has already travelled a nice distance from its’ bottom of 72.04 made on the 4^th of October 2011. Do not make your positions big and when (and if) the pair breaks up move your stops upwards when the security goes up.

Hope the trend analysis was useful. 

See also: 

Breakout trading

Range trading

Day trading

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.

Trend for 27th of March 2011

Today I just wanted to write a few thoughts of mine regarding aud/jpy pair trend. From its’ most recent low which was established at 74.40 level on the 16^th of March, the pair rose more than 900 pips with minor retracements. When the pair runs up such a distance in a very short period of time you expect it to run out of steam sooner rather than later. When you look at the charts you become even more convinced about a reversal of a trend in the pair. 

You have to be very cautious when a pair approaches towards some resistance and support as there are much bigger chances that the pair will reverse there and not continue its trend. As far as I see, the pair is at important resistance now and I am in a selling mood about the pair. 83.70 level was touched quite a few times in the past and the pair reversed from there. A chance for a reversal is much bigger due to the fact that aud/jpy has been climbing to the present height without stopping and the bulls should be pretty tired now. 

I do not mean to say that the trend will completely change now, but I do believe there is going to be a correction and the pair will fall to 81.00 level. Of course, this is only my prediction, but as I am following tendencies I state what I state, because there are more chances for the pair to reverse now, rather than continue its’ upward trend. 

Read my previous posts:

Gbp/jpy short term trend

Continuation of gbp/usd trend

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.