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AUDJPY Trade Setup (Jan 8)

Profile photo of YJ Baik - Forex.Today by YJ Baik - Forex.Today
2016-01-08_12-56-25-AJ3

Dear Carry Traders,

AUD was a dropping knife yesterday.  So I didn’t even think about buying AUD.

However, AUDJPY has dropped down to an interesting area.  Thus I thought it may be worth mentioning about my possible Long Trade.

2016-01-08_12-54-04-AJ1

AUDJPY pair dropped 500 pips dramatically from the up channel, and currently the price is at the previous low level and bounced up a bit.

Is it forming Double Bottom, or just a retracement ?

At least based on H4 chart, we can only think about selling this pair because the price is well below 21EMA, and perhaps sell from 21EMA (84.0 ish?)

2016-01-08_12-55-21-AJ2

 

However…

Hourly chart is very interesting.

2016-01-08_12-56-25-AJ3

As you can see, there is “Double Bottom followed by Higher High” + “Bullish Divergence”.     This is the textbook Buy from the next Higher Low.

Where to buy from?

As usual, from Fib38.2% – 61.8%.

2016-01-08_13-00-41-AJ5

 

The target?   For Carry Traders, there is no target, right?   You want to stay in the trade as long as possible.

However, for the day traders, you may want to exit at 84.00ish, simply because that’s where 21EMA will be.

 

So short term long, and long term short?

 

We will see.

 

Hope this setup helps you build your own trade setup.

I think we can apply this strategy for other YEN pairs as well – buy from the next Higher Low, until H4 21EMA. Then sell??

 

YJ Baik – Forex.Today @ Tokyo

 

 

 

 

 

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