DISCLAIMER: I am not a financial advisor nor certified analyst and definitely not a pro trader. All contents discussed on this blog are solely my own personal views and for Trading education/entertainment purposes only. Forex Exchange Trading is very risky. Losses can exceed deposits. Enter with discretion.
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Good day once again. As my second article for today, 30th of August 2021, I have thought carefully of which Forex pair that I am going to discuss a trading plan on. Firstly, I need to give some metrics to base analysis with and of course it will be safe to say that the US dollar can be the best reference currency. So I came up with the AUDJPY idea.
I am going to discuss in this article which currency I think will perform better against a strengthening US dollar based on how I assess the recent technicals as we go on.
Both the Aussie and Yen are down against the Greenback. The latter has been trading in a weekly range boundaries from 107.50 down low and 111.50 up above and consolidating for many weeks now. Meanwhile, the former made a latest weekly double bottom candles just enough grounds to hold a crucial 0.71 support! This latest bullish move may give room to re-test the break-in-support 0.73 which turned into resistance on the weekly view.
Let us go back to my question earlier, which among the pair can be the long side of the story by scaling down the balance. On the contrary, both the AUDUSD and AUDJPY weekly charts have similar price action by averaging approximately almost 10% correction since May 10, 2021 weekly high. So the answer can really rely on the one that perform better once Fed’s chair latest comments on USD tapering rolls out before EOY 2021.
The convincing weekly bullish railway track or double bottom candles for the AUDJPY chart on August 16-23 paved way for showing the long side will be in the base currency itself, the Aussie.
At the time of writing this analysis, the AUDJPY latest weekly candle for the week ahead August 30th is a Doji. So this can be a buy/long opportunity once the 23.60% Fibonacci retracement is re-tested, that’s 79.85 as my entry mark. Keep an eye on the daily RSI below 50 as resistance since June 23, 2021 so there is a possibility of sellers still setting the pace or control.
I will place a stop loss at the AUDJPY’s weekly 100 SMA around 77 to avoid further slide downwards. My take profit exit point will be near around the 10-week high, that’s precisely 84.
This is not much of a trading plan which only gives approximately 1.46 risk:reward ratio. Best of luck. Surely the Forex markets have become volatile lately with plenty of trade chances to take.
Thanks a lot for reading.
Have a wonderful and safe week ahead.
