$AUDJPY Heading Towards Double Top?

By @ibtimes on

Like the other JPY pairs, the AUDJPY was headed for a major breakdown finally succumbing to the Kijun line shortly after yielding the 30EMA for the first time in 2mos.  Then after the pair made new lows for the month of April, the pair went ballistic and in one daily candle took out the previous 6 candles.  This favors the upside but threatens to form a double top around 73.50 which was the high for 09′

Taking a look at the chart below - we see how the pair broke all three lines;20EMATenkan (white)Kijun (red)

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in one strong push.  I cannot imagine any short term day traders wanting to short in the face of this candle and sellers will likely emerge towards the yearly highs.  The only thing stopping this pair is how it currently sits at the 61.8% fib of hte most recent sell off from 73.50 to 66.81 at current market 70.99.  If this breaks by about 50 pips, expect this pair to challenge the yearly highs by early next week at the latest.

The intraday chart offers some more insight showing the pair has sauntered above the 20EMA on the 30m chart for the past 36hrs with no breach.  Even though the Momentum and CCI are not inspiring, as long as the 20EMA and Kijun continue to support, this pair should coast upward.  Another scenario is it creates a strong bullish Tenkan/Kijun cross to the upside which should ignite more technical buying.  If the cloud on the 30m chart breaks, expect the pair to unwind to about 69.00 and 68.50.  Also make sure to keep an eye on the 20CCI for if it starts posting negative readings below -50, the pair could start to unwind further but short term models suggest upside is favored.

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