I agree, the decision to make is whether I want to hold it for a possible retest of 70.40. In the end I think it’s a good long term trade so I will hold. I also drew another fibonacci retracement to forecast a potential target. Putting the most recent consolidation between the 38.2% and 61.8% retracements would call for a move all the way up to 94.75. This could take months to develop.
AUD/JPY broke above the downtrend line so I added to the position. Average buy price now moved up to 76.104
The chart below is a 60 minute chart. Compare it to the daily chart from the previous post and the trend line. I added the trend line to the 60 minute chart and it was testing this trend line earlier this week, but has now been able to trade above it for 12+ hours which is good enough for me.
Fundamentally, the rally in stocks has probably helped put risk aversion in the back seat giving a boost to the trade, so three cheers for the stock market.
Nice trade. I started watching it last week after the RBA rate decision. Naturally when I added the second position yesterday I picked the top. And then today, so goes equities, so goes AUD/JPY.
But I have the RBA on my side so it seems. Came within 66 pips of the limit last night. I’ll watch the daily candle that’s forming today. If it closed right now, I would probably get out. Will wait for 5pm to decide.
Looking back, yesterday was probably a good trade setup for anyone trading on candlestick patterns, but then again hind sight is 20/20.
Talking out loud here, is this pattern signalling a downturn in equities also. Remember it was around this time the past two years that volatility started to pick up, and equities started to turn down. Maybe the JPY crosses are acting as a leading indicator.
That sort of action could cause AUD/JPY to go down regardless of what the RBA is deciding, and a sell off could be much more severe in the short term. The EUR/JPY gives a better picture of this in my opinion since it has failed to make higher highs in each of the past 3 rallies since May. AUD/JPY has held up better due to the better fundamentals in Australia but even it may succumb.
Yesterdays daily candle didnt say much, I was anticipating an engulfing bearish candle. However I see where a retracement is possible to test the counter broken down trend line, then I will look to BUY on a reversal candle formation at the 61.8. See chart attached.