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AUD/JPY To Resume Uptrend?

Last updated 4/6/2009 7:53 PM EST (GMT -5) 0 Comments - Add your comment

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Bradley W. Gareiss

Technical Analyst, GFT

The AUD/JPY has experienced a relatively strong uptrend for most of 2009.  The pair has seen some resistance at the top of the channel on the 8hr Chart, which has pushed the pair into a potential bullish Gartley/double bottom.  This is an ideal situation because the pair has trended strongly, and the move down may just be a small correction down off the top of channel.

We are looking to buy the AUD/JPY if it falls to 70.37 (Point D).  Point D is located at the convergence of the following points:

The bullish Gartley and double bottom we are looking to trade is fairly straightforward.  The bullish channel on the 8hr Chart is also a nice piece of additional convergence.  As always, one of the most important things to watch in this pattern is how quickly CD completes.  Ideally, we want the leg to drop slowly and enter where we have drawn the hypothetical entry.  If there are long bars near the completion of the CD leg, we will not take the trade.  Also, if the pair comes within 10 pips of reaching our entry, does not enter, and reaches T1 before entering, then the trade is invalid.  The trade is also invalid if the pair rises above 71.85 before reaching the entry at 70.37.

To recap, we will look to buy the AUD/JPY at 70.37 with our stop placed at 69.95.  Our initial profit targets are 70.96 (38.2% of CD) and 71.44 (61.8% of CD).

8hr Chart - Strong bullish channel.	30min Chart - Bullish Gartley; buy @ 70.37.

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