After the AUD/JPY currency pair reached its highest level in more than a year at 88.03 on February 16 it’s been falling to trade now around 86.00 levels. The pair is trading inside a price channel (we can see in blue color) which began on December 29. The pair has based 4 times before at the lowest limit which the prices are trading near to right now.
From 40 pips down we have a demand zone at 85.80 - we can buy the pair when the prices reach it and make a bullish price action candle. It’s expected that within the next trading hours the pair will trade between two key important levels at 87.30 and 85.80. The stochastic indicator is still giving us a sell sign at 37 levels.
The Next Few Days
So, what can we do?
From this analysis we can buy the pair once we see it is touching the demand zone at 85.80 and the price channel as well. We are waiting for a bullish price action candle like the pin bar. However, if the pair rises directly without retesting the channel we can enter the market with long positions when it breaks the SMA at 86.50 and keep our target at the downside trend line at 86.90.
We have to be careful about the upcoming hot news like the Cash Rate and the RBA Rate Statement tomorrow from Australia.
