AUDJPY has been difficult to trade recently, chopping back in forth since the September jump in the yen. Price retested the level set before the Bank of Japan intervened, and has rocketed up higher since, breaking through the descending channel. Its next challenge will be breaking through resistance at 81.75.
Oil appears to be coming back to life, breakout of its month-long consolidation. If prices can convincingly break through the 84 level, we should expect a strong move up, parallel to the late September and early October move of $8, potentially reaching 90-91 in a short amount of time.
Pattern failure is perhaps the most powerful technical indicator available. When the market expects a particular outcome, and the reverse occurs, the move can be significant, amplified by everyone on the wrong side of the trade. After a strong bouce from parity, the USDCAD appeared to be forming a bull flag, and broke in to the upside (point A). That breakout proved to be a fakeout, and price quickly reversed course, moving down through support with ease. We can expect price to quickly retest its recent lows of .9980.
Written by bforex.com