- ricocheting off a previous level at ~95.20;
- rejecting the level which is contiguous to 95.20;
- bouncing off and (most likely) closing below the 50 ; and
- bumping into the falling encountering resistance.
Convergence is observable on and hidden divergence on . Both and are in overbought territory and are ostensibly preparing for a reversal.
Entry - below the low of today's reversal bar close
Stop loss - above the high of today's reversal bar close
Target - first profit taking zone at previous low/swing low (91.75), and possibly lower at 91.00 if swing low violated
* Ignore the placement of the arrow indicating convergence.
Price is currently trading above weekly resistance (~100). It has also churned new highs. There is evident RSI divergence which supports the case for a potential pull back, given also the over extended price from the moving averages, where for me, ideally, a reasonable entry point to rejoin the trend would be either at the 20 ema or preferably the 50 ema for better profit potential. To trade short would mean the play out of this "expected" pull back with even clearer signs to be able to enter short. Now, although we have ourselves a bearish reversal bar, it isn't convincing enough for me to short this pair in a potential pull back. I'd like to see a clean high test bar/bearish pin bar candle to be able to do this. For all we know, since price has broken the 100 level, with today's bar which appears so far to be a low test shows a potential retest of 100 to continue long into ~104.30. Because JPY is incredibly weak, seasonally its pairs normally trade aggressively to the upside and often create shallow retracements. Hence, there are mixed signs. I've added an annotated weekly and daily chart to illustrate my thought process. Personally I would look for and stick to long opportunities with the trend on this one and every other JPY pair.
I'm afraid this may not have been of great help to you. BUT if AUD/JPY does enter corrective action, then I would trade short on the 60 minute or even the 15 minute timeframe to capitalise on larger reward:risk as follows, for which I'd have to see today's close as a high test. Still, this scenario, given the price oscillation during the duration of BOJ's QE stimulus programme, and presently, an encouragingly strengthening USD, for any JPY pair, if I would, I'd trade it in a very gingerly manner to the short side.