Do you know what’s better than knowing it’s the weekend tomorrow?
Earlier this week, we talked about AUD/JPY chillin’ like ice cream fillin’ inside a descending triangle.Fast forward to today and the Aussie has finally broken below its triangle support. More importantly, AUD/JPY has gone back up to test the broken support level!
The cherry on top of this sweet opportunity is a possible bearish divergence on the 1-hour time frame.
If you think that the Aussie will extend its losses against the yen, then you can short at current levels and aim for yesterday’s lows or even the inflection points near the 75.00 levels.
Not convinced that AUD/JPY is headed for a downtrend? You can wait for AUD/JPY to go back inside the triangle or even break above the triangle resistance and then target previous highs near 76.60 – 76.80.
I spy with my eye a rising wedge in the making!
For newbies out there, wedges form not by slicing cheese wheels but by price forming higher lows that are steeper than the trend line formed by higher highs.The School of Pipsology tells us that rising wedges at the end of uptrends tend to break to the downside. And since breakouts tend to be as strong as the base of the triangle, we could be looking at a 150-pip move for the Kiwi.
A break below the wedge could take NZD/USD to just below the 100 SMA on the 4-hour chart.
On the other hand, an upside breakout (a wedge still reflects indecision after all) could lead to NZD/USD retesting previous areas of interest near .7000.
Watch this one closely, forex brothas!