By: John Ursus
Timeframe: W1
Recommendation: Short Position
Entry Zone: 101.50 – 102.50
Take Profit Zone: 87.50 – 89.00
Stop Loss Zone: 105.50 – 106.50
The AUDJPY has rallied sharply and covered over 2,500 pips in this W1 chart. The rally took this currency pair from an intra-day low of 74.49 to an intra-day high of 105.41. After reaching its intra-day high a healthy reversal took this currency pair into its support area from where the current rally emerged. The AUDJPY is now trading inside its horizontal resistance area from where another sell-off is possible as bullish factors seem to be exhausted around current levels.
A fundamental catalyst is expected to result in a profit taking reversal which could be accelerated as new short orders will be placed in the AUDJPY. A breakdown below its ascending support area could sharply increase selling pressures in this currency pair. Forex traders are advised to spread their entries over a 100 pips range between 101.50 and 102.50. The upward potential appears to be rather limited while the downside potential remains very attractive.
