Suggestion for Trade: Buy around 91.07-91.17, Stop Loss at 90.57, Target 92.90
Yesterday Aud/Jpy once again gave a daily closing above a key trendline support, thus maintaining the downward sloping channel and now it seems that the pair is all set for a bullish reversal off 50% fib level.
Major Support & Resistance Levels
At the moment the pair is around 91.58 where it is likely to find a very strong support around 91.07 to 91.17 area which is 50% fib level of last major move as well as channel support. A break and close below this support area may push the pair into strong bearish momentum targeting 90.01 and 88.60.
On Upside, the pair is expected to face first hurdle around 91.92 (hourly 55 MA) ahead of 92.15 (38% fib level and 100 MA) and then 92.49 which is 100 DMA. A break and close above this level may open doors for 92.93 and 93.29.
Slight positive divergence can be noted on hourly timeframe with MACD showing strength for upward movement. 55 DMA is still above 200 DMA suggesting that bullish round is not over yet. Relative Strength Index (RSI) readings are close to oversold territory which means longs dips are not expected.
Aud/Jpy and all JPY crosses are believed to be positively correlated with USD/JPY. Today is a big day for USD as Federal Open Market Committee (FOMC) members will make a decision about the fate of monthly asset purchase program. A decision about tapering in Fed’s monthly bonds buying program will be seen highly bullish for USD and USD/JPY (alongwith JPY crosses) may skyrockets to print fresh highs, so a lot of volatility is expected later in the US session. It is therefore always suggested that never ever trade without stop loss and proper risk/reward ratio.