Matt Simpson, CFTe, MSTA
CityIndex
To follow up from the previous video AUDJPY has present a Technical Buiy set up above the aforementioned support zone of 96.0
Previously I discussed the potential for a topping pattern to form, leaving the option to take a counter-trend trade (to take advantage of a potential retracement) or to be patient and wait for a pullback before seeking bullish setups. I suspect we have now seen the completion of the pullback.
Whilst the original bearish wedge popped higher we have since seen a decent pullback, and tested the 96 support zone to suggest a technical buying opportunity.
Yesterday's close confirmed a Morning Star Reversal formation, respecting the 50-day MA, 50% Fibonacci retracement and Monthly Pivot.
Today's price action is retracing within yesterday's range (a Bullish Engulfing Candle) which may provide a better price to establish a long position.
A deeper retracement towards 96 could provide a higher reward/risk ratio to target the 98.70 high. Above here sets 99.40.
A break below 96.4 swing low suggests a deeper retracement towards the 95.60 level which houses a potential bullish trendline and 61.8% Fibonacci retracement.
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