AUDJPY may be forming an ending pattern on the daily chart. A five wave pattern is visible, possibly topping out at 88.175 15 Feb 2017, when the wave 3 price high of 87.53 was reached on 15 Dec, 2016. If this is the case, then price shouldn't close above 88.175, however, price break this level but recede back to the confines of the diagonal.
If this scenario is wrong, look for price to continue on to where wave 1= wave 5 (92.90) or the breakout projection of the triangle base formed from the high of wave 3 to the low of wave 4, projected from a breakout of the top triangle resistance line. (92.20)
Strategy - (Aggressive) bearish against the 88.17 level. Wait for price to pierce the top triangle resistance line and fall back into the triangle body on a closing basis, confirming that 88.17 is a valid resistance level. You could also monitor if any momentum divergence occurs when price approaches 88.17 and fade the move on a momentum play if price closes below 88.17.
Strategy - (Conservative) bearish however, wait for a break and re-test of the lower triangle support line. Stop would be approximately 200 + pips against 88.17 or higher - depending on the most recent price action.
If this scenario is wrong, look for price to continue on to where wave 1= wave 5 (92.90) or the breakout projection of the triangle base formed from the high of wave 3 to the low of wave 4, projected from a breakout of the top triangle resistance line. (92.20)
Strategy - (Aggressive) bearish against the 88.17 level. Wait for price to pierce the top triangle resistance line and fall back into the triangle body on a closing basis, confirming that 88.17 is a valid resistance level. You could also monitor if any momentum divergence occurs when price approaches 88.17 and fade the move on a momentum play if price closes below 88.17.
Strategy - (Conservative) bearish however, wait for a break and re-test of the lower triangle support line. Stop would be approximately 200 + pips against 88.17 or higher - depending on the most recent price action.