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AUD/JPY Update

AUD/JPY Update

by The MoleNovember 22, 2011

Since things are degrading rapidly I thought it would be a good idea to give you guys an update on what’s happening over on the AUD/JPY side.

If you are a noob then you may be unaware that the AUD/JPY is a favorite among carry traders and thus offers us a pretty close barometer of what is or will be going on over in equities. As a matter of fact quite often AUD/JPY happens to be leading even the S&P E-Mini futures. Perhaps that is to some extent due to the sheer size of the Forex market – the world’s largest with over $4 trillion in average traded daily value. Many traders are attracted to trading forex because of its high liquidity, around-the-clock trading and the amount of leverage that is afforded to participants.

Anyway, here’s a screen scrape of the 60-min AUD/JPY panel on the ZeroFX feed:

Well folks – it ain’t looking good if you’re long equities or the AUD/JPY. What I keep seeing in the past few days is one NLBL rejection after the other. There are attempts to produce a base and lure in buyers but instead of green candles we see sudden drops to the downside. I don’t think this is the right time to go bottom fishing – always remember the trend is your friend until it’s over. The 60-min panel shows clean rejection at the 75.85 NLBL which was followed by a drop through the 75.64 NLSL. This may be an AH fake out but we need to start breaching resistance levels. Not shown on this chart is a brand new NLBL at 75.83 – which is good for the next five hours. Whether we even get close is of course a completely different question.

And here’s the 5-min panel – almost the exact same configuration – a fractal of the 60-min chart. Again, we see rejection at a possible NLBL followed by a drop through the 76.27 NLSL – which is currently being retested. If you are a Zero sub then I recommend you look here for early signs of a reversal – assuming we’ll get one. That small divergence on the Zero signal may help lift us higher – if it doesn’t then you can probably expect continuation to the downside. FYI – since I took a snapshot of this chart we got a new NLSL at 75.2 – that should be active for the next half hour.


About The Author
The Mole
Mole created Evil Speculator amidst the chaos of the financial crisis in early August of 2008. His vision for Evil Speculator is a refuge of reason, hands-on trading knowledge, and inspiration for traders of all ages and stripes. You can follow him and his nefarious schemes at the usual social media waterholes.
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