Live Trade – AUD/JPY

Filed under: Live Trades |

 

I already have a live trade in play for March, this time on the AUD/JPY forex currency pair, which for those of you that don’t know is the pair for the Australian dollar and the Japanese yen.

 

Figure 1.

Figure 1.

To begin with, take a look at Figure 1. This is the daily chart for the AUD/JPY pair. What you can see here is that price had been in a very strong uptrend for a long time, but recently, this trend seems to have ended, with the 8-day exponential moving average crossing below the 21-day exponential moving average for the first time in a long time. This followed a very long bearish black candle. I have also marked in a significant area of support/resistance, and this area seems to be holding well, with two bearish pin bars unable to close above this level. At the second of these pin bars, I had a good look at it, and zoomed in to take a look at price action on the intraday charts.

 

Figure 2.

Figure 2.

Figure 2 shows the 4-hour chart for the same AUD/JPY pair. What you can see here is that a nice bearish engulfing pattern formed right at our area of support/resistance, and a bearish pin bar just a few hours later confirmed this. It was here that I put an order in to go short at a 50% retracement of the pin bar, with a stop loss placed just a few pips above the high of the pin bar, and a target set of five times the risk – making for a really good risk-reward scenario of 1:5. It should also be noted that the target is just before the most recent low of the daily chart – so this is a very logical area to aim for. We will see how this one progresses over the next few hours, and I will be back on Monday to give you an update on how it is progressing.

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