Buying AUD/JPY Above 97.00


AUD/JPY is at the crossroad as it shifts from a bearish market back to a prevailing bullish market. The daily chart shows a market that broke above a multi-month consolidation resistance at 96.50 in August, signaling bullish continuation. Price came up to 98.67 in September before pulling back. Then, we saw buyers around the 96.50 area. Currently, the look in the daily chart is still very bullish with price above the moving averages, and the RSI holding above 40 after it tagged 80. 

audjpy daily chart 9/18(AUD/JPY Daily Chart 9/18)

Now, with this bullish breakout confirmation developing, let's take a look at the 4H chart. Here we see a market that is at the crossroads with price in the middle of the moving averages. The RSI has tagged 30 and it now threatening to break above 60, which would signal loss of bearish momentum. 

There was a double bottom around 96.50, after which price came up to 97.50. So far, it is consolidating just above the double bottom, showing some bullish bias as it respects a price bottom. 
audjpy 4h chart 9/18
(AUD/JPY 4H Chart 9/18)

Trade Idea, R:R assessment:
I believe in the short-term, we can put in a buy position around 97.00, let's say 97.15. If we have a stop below 97.00, ie. 96.70, we have a 45-pip risk. Our target can be first limited to the 98.10-20 area, let's say 98.15. This would yield a risk of 45 pips and a a potential reward of 100 pips, translating to a slightly better than 2:1 reward to risk ratio.

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