Matt Simpson, CFTe, MSTA
CityIndex
After some minor adjustments of levels and a convinsingly bearish close, we may have finally seen the top in AUDJPY. Maybe.
On a purely technical level I do like to go short on a second bounce. The trouble you will often find however that as price grinds higher from the lows there is always 'room for one more high' and you risk missing the trade as you finally give up on the idea and move on. This could be a classic example of this.
However I will try one more time to see th end to this correction (which I originally had below 93). Yesterday's high was a Dark Cloud Cover which respected the Monthly Pivot and 50% retracement level. This area also coincides with the trendline form the Feb '14 lows to cap as resistance.
At this stage I am hoping for another pop higher which would allow for a sell-limit within yesterday's candle rage. This also allows me to have a stop further above yesterday’s high to [hopefully] avoid any last-minute spikes before the downside resumes.
In terms of catalysts we do have Draghi and Yellen speaking tonight. Whilst this is not directly linked to AUD we can look at either AUDJPY or NZDJPY as 'riskometers', with a ‘risk-off’ environment seeing money flow out of high risk assets and into safe havens such as JPY. In theory…
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