AUDJPY - Long Trading Idea on the 4h Charts.
Introduction:
Please read the full post before considering taking action.
AUD moves, recently, have been mostly fueled by news, while it still respected technical formations and was confined in a range-bound status since the beginning of 2019. The ongoing US-China trade wars, however, shifted this scenario and a risk-off sentiment took place in the forex markets. JPY rallied and AUDJPY suffered a loss of 240 pips in a very short term.
While the trade war is still ongoing, there are a couple of factors we should consider:
- AUDJPY is trading in its lowest levels since 2016, and, before that, 2011 (if we disregard the january flash crash). New lows, of course, could form, but we must always bank our bets in the most likely outcome.
- A trade deal is on the table, since it's the only way to stanch the bleeding in US (and global) equities and stocks markets.
- If a risk-on environment is reinstated, AUDJPY is likely to range back and even break the upper resistance, according to historical data.
- This is a carry trade, as rollovers are positive.
In the charts there's a clear downtrend, so taking a short is actually viable, but the RSI divergence indicates bears are losing strength.
How to Proceed:
Our team has opened a long here, with scaling orders going down all the way to 75.250.
Targets:
This long has 80.000 as its main take profit target. This can be dynamically changed, i.e., according to live price action, should circumstances change. The arrows and horizontal levels are great indicative, though.
Stop-loss (Invalidation of Analysis):
We aren't using stop losses in this one, because of the positive rollovers. Adjust position sizes accordingly.
Risks Involved:
Calling reversals on a strong trend is always risky business, and a Trump tweet could dramatically shift the whole scenario.
Side-notes:
Please keep in mind that the markets have been reacting strongly to news these days, specially on smaller majors, such as the NZD and the AUD, which could create instability. We are trading the whole forex system here, not only a pair. These positions should be watched closely.
Please leave your comments below to inspire us to continue our work and don't forget to follow us! Feel free to send us a direct message with any doubts you might have and experience a great trading session!
Please read the full post before considering taking action.
AUD moves, recently, have been mostly fueled by news, while it still respected technical formations and was confined in a range-bound status since the beginning of 2019. The ongoing US-China trade wars, however, shifted this scenario and a risk-off sentiment took place in the forex markets. JPY rallied and AUDJPY suffered a loss of 240 pips in a very short term.
While the trade war is still ongoing, there are a couple of factors we should consider:
- AUDJPY is trading in its lowest levels since 2016, and, before that, 2011 (if we disregard the january flash crash). New lows, of course, could form, but we must always bank our bets in the most likely outcome.
- A trade deal is on the table, since it's the only way to stanch the bleeding in US (and global) equities and stocks markets.
- If a risk-on environment is reinstated, AUDJPY is likely to range back and even break the upper resistance, according to historical data.
- This is a carry trade, as rollovers are positive.
In the charts there's a clear downtrend, so taking a short is actually viable, but the RSI divergence indicates bears are losing strength.
How to Proceed:
Our team has opened a long here, with scaling orders going down all the way to 75.250.
Targets:
This long has 80.000 as its main take profit target. This can be dynamically changed, i.e., according to live price action, should circumstances change. The arrows and horizontal levels are great indicative, though.
Stop-loss (Invalidation of Analysis):
We aren't using stop losses in this one, because of the positive rollovers. Adjust position sizes accordingly.
Risks Involved:
Calling reversals on a strong trend is always risky business, and a Trump tweet could dramatically shift the whole scenario.
Side-notes:
Please keep in mind that the markets have been reacting strongly to news these days, specially on smaller majors, such as the NZD and the AUD, which could create instability. We are trading the whole forex system here, not only a pair. These positions should be watched closely.
Please leave your comments below to inspire us to continue our work and don't forget to follow us! Feel free to send us a direct message with any doubts you might have and experience a great trading session!
Trade active:
Bearish AUD numbers came out recently and pushed the currency further down. We are still keeping the trades open and scaling more positions as we go.