AUD/JPY Can’t Find Momentum Below 200DMA
The AUD/JPY has yet to be able to sink below the daily 200 period Simple Moving Average as the pair continues to trade up against the daily range highs. This is 1) a sign that the aussie is not gaining on the yen but also 2) that risk may not be completely coming off the table as the AUD/JPY remains resilient.
The AUD/JPY is continuing to see stagnant trading as the pair simply won’t trade lower from what could be considered a distribution range high area. With the 34EMA Wave moving at “two to four o’clock” and an overbought Stochastics (21, 1, 3) the expectation would be that as the Dow also finds itself unable to find support above 13,000 that the AUD/JPY would move lower on the comm doll weakness and yen strength and that is just not happening.
To take advantage of what has been a very strong aussie dollar, the AUD/JPY would not be the pair to focus on since it is not in a bullish Directional Bias (consider that the AUD/CAD and AUD/USD are in nice uptrends while the EUR/AUD and GBP/AUD are in downtrends based on the aussie dollar strength) and therefore this leaves the AUD/JPY reflecting a confused risk environment and a poor candidate for an aussie power play.
Past performance is not indicative of future results
While I may not be focusing on the AUD/JPY for a aussie “power play” I am looking for aussie strength in swing buys on the AUD/USD, AUD/CAD and swing shorts on the EUR/AUD and GBP/AUD.
The distribution fade set up that I had outlined in an earlier update is simply not showing the king of selling resistance nor momentum that makes this trade a solid set up. In fact, the high today at 82.73 (just shy of the 82.80 minor psychological level) as well as the pairs support around the 200DMA (currently at 81.77) is showing that even with U.S. equities weakness, this pair is unwilling to move much lower within its sideways range.
As an active forex trader and Chief Currency Analyst for InterbankFX.com I do write for a number of sites all over the web and I am happy to say that I will be posting updates at www.IBFXconnect.com. My Activity Board will feature the trades from my trading account as well as intraday commentary.
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