All-in-all, AUD/JPY trend remains strongly bullish and triangle breakout just emphasizes growth potential. Considering the rejection of multiple support levels and indicators, the price should be ready for yet another 200 pip upside wave.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
This analysis was done on MetaTrader 4.
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Trade Idea Details:
AUD/JPY symbol on the MT4 platform
Key support levels: 75.66, 75.08, 74.82
Key resistance levels: 76.88, 77.75
The AUD/JPY consolidation phase has ended when the price broke above the triangle pattern, suggesting further growth potential. Pair has produced a strong move to the upside although it was not enough to test the key resistance.
AUD/JPY has tested 76.87 high and then corrected back, down to the triangle support at 75.08. We can clearly see that 75.00 psychological level has acted as the support because the price failed to break and close below with confidence.
Price rejected the 50 Simple Moving Average, then the uptrend trendline, and today 127.2% Fibs at 75.65. The Fibonacci was applied to the corrective wave down after AUD/JPY broke above the downtrend trendline. This might suggest that the price is about to move towards the next Fibs at 227.2%, which is 77.75 level. Another Fibs was applied to the point of rejection of the 61.8% retracement level at 75.08, and it shows that 327.2% almost exactly corresponds to the 77.75 upside target.
Potential Trade Idea:
Today price has approached the support at 75.65 area, where 127.2% and 38.2% Fibs are located. This seems like an ideal buying zone as long as 4h close remains above this support. The take profit is at 77.75 with the stop loss below the recently established low at 74.82. This provides a good risk to reward ratio with a high probability of success considering it is a trend following idea.