In our last report about the AUD/JPY currency pair it was trading at 85.93 and we recommended buying it at the current levels, making our targets at 87.40 and 89.20. The pair already hit our first target and rose further to record the highest prices at 89.18, just 2 pips away from our second target, so we would close the opened positions if you have any, and take a look at the chart again.
The pair is trading inside a price channel and after breaking the downside trend line we mentioned in the last report we will keep our positive vision for the pair until this moment. At the same time we can recognize that the pair made a resistance area at 89.00, so we have to watch what would happen to it. The prices declined close to the support level 87.38 and we saw the RSI indicator was at 10 level, which means the bulls have the power more than the bears in the market.
The Next Few Days
After we analyzed the chart well we can discover that we have three scenarios, out of which we predict one will happen:
The first one is that the pair will rise and break the resistance area to reach 90.30.
The second one is that the pair will retest the support area 87.40 and will rise again.
In the third scenario the pair will break the channel down to reach 85.70.
So, we can buy the pair now at the current levels 88.34 with a small lot and we can take another buy position if it breaks the resistance level or retests the support one. However, if the pair breaks the price channel we have to close all buy positions and take a sell one.
This week we don’t have any hot news from Australia nor Japan, but be careful about any uncalendared news that can affect the market.
