AUDUSD is up against key horizontal and trendline resistance at the 0.7620/30 level. This sets up a short opportunity with a good risk:reward ratio. On a break above this area, we can easily see a short squeeze toward the 0.7730 area as bears throw in the towel. If this happens, we would likely see across the board dollar weakness with the euro and pound also going higher. Liquidity will still be lower than average on Friday because many US traders will still be on their Thanksgiving extended w…
Tbirdfx's Blog
AUDJPY trade idea
Going into the US Thanksgiving holiday, I am keeping an eye on a non-USD pair: AUD/JPY.
JPY has showed relative strength, even on days where equities have been going up. Conversely, the AUD has been showing weakness, even on the back of rising commodity prices in recent weeks. Therefore, I believe that shorting the AUD/JPY is the right trade based on a fundamental analysis (my directional bias).
From a technical perspective, the pair is at support, which is the upper part of the trading range f…
USDJPY not impressed by equity strength
While equities, and especially US indices, show strength today, I take note of the fact that the Yen is still relatively strong, which could be a warning sign that stocks will soon correct lower again. Soon should mean in the next 1-2 days going into the Thanksgiving holiday. USDJPY has retraced a bit from the key 112 area where a confluence of support held it up on Monday. At this point, I'd begin to look for new longs in JPY pairs against USD, EUR and also AUD.
USDJPY leading the way
Going into the US Thanksgiving holiday week, my eyes will be on the USDJPY. While further weakness in equities and weakening US bond yield could put the pair under further pressure, we can also easily get a bounce first thing on Monday morning. This is because the pair is sitting on key support on both weekly and daily charts. On the weekly, the 50 and 200 SMAs provide support, and on the daily chart we also have the 200 SMAs coming in just under the key 112.000 handle. I want to see a break bel…
JPY finally buckled under weight of equity weakness
As expected, the JPY strengthened this past week. This came on the back of prior week's shooting star candle on the Nikkei. My limit order on AUDJPY did not get filled but I did profit going long the JPY against the USD, the GBP and the EUR. Next week, I will keep an eye on the USDJPY. It needs to clear the 112 handle and the daily 200 sma before I'd be comfortable shorting the pair again.
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