The AUDJPY has completed a minor bounce after correcting from its horizontal resistance zone as visible in this D1 chart. This currency pair is now trading at the lower band of its resistance zone and we believe it will breakdown from current levels and correct into its horizontal support zone which is enforced by its 200 DMA.
MACD indicates that momentum is fading and the histogram as well as moving average are approaching the centerline. We expect a breakdown to occur as this currency pair completes its correction. RSI is trading in neutral territory and already initiated its move lower.
We recommend a short position at 93.50 which would be an addition to our initial short position which we took on September 4th at 90.75. We also have a long hedge in place which we took on May 30th at 97.30.
Traders who wish to exit this trade at a loss are advised to place their stop loss order at 95.00. We will not use a stop loss order and execute this trade as recommended. Place your take profit order for both short positions at 91.00.
Here are the reasons why we call the AUDJPY currency pair lower
- The AUDJPY currency pair is trading at the lower band of its horizontal resistance zone and we expect it to breakdown from current levels
- MACD indicates that momentum is fading as the histogram as well as moving average are approaching the centerline
- RSI is trading in neutral territory and initiated it’s descend from current levels
- Profit taking after a small rally in order to realize trading profits
- New short positions by institutional swing traders