You’re in for a treat today as we’re lookin’ at not one, but TWO yen setups on the 4-hour and daily time frames. Get ’em while they’re hot!
Remember the double bottom that we were eyeing a few days back? Well, that turned out to be…not the bottom.
AUD/JPY dropped to the 77.00 psychological handle, which is right smack at the pair’s descending channel support on the 4-hour time frame.
What makes the consolidation interesting this time is that stochastic is hinting at a potential bullish divergence.
Think AUD/JPY will jump back up? Buying at the earliest signs of bullish momentum could get you decent pips especially if you place your stops just below this week’s lows.
Not everyone is built for countertrend trading though. Make sure you’ve (successfully) done it once or twice before you risk your moolah on it!
If you’re not comfortable trading against the trend, then you could always wait for a pullback to the mid-channel or even the channel resistance levels and just ride the trend.
Don’t look now but USD/JPY is back at a MAJOR psychological level!
The pair is now back at 110.00, which served as support back in late March and resistance in mid to late January.
With stochastic sporting an oversold signal, you can bet your pips (with proper risk management, of course) that other bulls are already waiting for their opportunity!
Buying at the earliest signs of bullish momentum would make for a good reward-to-risk ratio if USD/JPY pops back up to its 112.00 previous highs.
Not a fan of the dollar? That’s alright, you can also wait for a break below 110.00 and aim for the previous lows near 108.75 or 107.50 instead.