Wednesday, January 27, 2010

AUDJPY: Signs Of A Bottom?

First, I have to warn you, I'm eternally bullish on the AUDJPY. This means I'm wrong on my predictions a fair amount due to my long term viewpoint.

With that said, I've noticed a chart sign that implies some possible upward movement.

Take a look:

It may not be easy to see, but notice how the recent tails, at 09:00, under the last few candlesticks did not project below the closing prices during a recent, at 03:00, previous low?

Up until now, for days now, we'd see the close of each new low at the level of the tails of previous lows. This doesn't mean we can't go further down -- especially during the Asian session. However, it does mean that we have the potential to be running out of downward pressure.

If so, whether it is short lived or not will depend on upcoming news and the impact this has on the sentiment of traders. As you know the political unrest in the US and the tightening in China has set the mood negative lately.

UPDATE: Boom. Instant downward movement to invalidate my sign. The fact it showed temporarily may hint at trend weakening. We do have a fair amount of gloom and momentum to work through.

UPDATE: It's now 23:00 and AUDJPY has just risen to just under 81.60 which would seem to suggest that downward pressure had indeed been flagging. Of course, nothing goes straight up or straight down... but trading 100+ point moves is rather nice.

Tuesday, January 19, 2010

AUDJPY: Poised?

I don't have time to snip a chart or anything, however I'd suggest taking a few moments to analyze the AUDJPY.

What I see is the potential for a so-called "big W" on the 3 hour chart. You'll notice the right side of the W has a double bottom. If we do get the full "big W" we should see some dramatic upward movement over the week.

Fundamentally, inflation, employment and other indicators in Australia seem to indicate the need for the RBA to continue to increase rates. If any more hot growth news comes out prior to February we may see speculation on a 50 basis point increase instead of the widely expected 25 basis points.

In summary, look for a safe low-risk entry point if your analysis of the charts agrees (or even disagrees) with mine.

UPDATE: If you disagreed with me you'd be happy with this morning's (Jan 20) breakdown... though so far the next resistance point seems to have held.