Thursday, April 16, 2009

AUDJPY: Slow Decline

I'm sitting here watching the slow, achingly slow, decline in the AUDJPY.

Based on RSI and stochastic evidence, not shown on the image below, it's very possible that we'll get an upturn soon.

Anyway, this image shows you that we are continuing to approach what I've called a containment field. It represents a possible consolidation zone while the market tries to figure out whether to ultimately head north or south.

Collision Alert!
Obviously, I'm bullish on the AUDJPY so I expect this to bounce. A lot of other people, on Twitter or elsewhere, seem to be bearish.

... continuing ...

If we do get a solid bounce, you'll notice that we'll have a double bottom in the right side of a W shape. I'd generally expect this to be bullish, but we have to figure that we'll be going into the Asian session before long. One possibility is a trouncing of the Yen while another is an increase in risk aversion -- generally bad for carry trades.

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