AUD/JPY has just tested and bounced off the bottom of the range visible on the 1-hour and 4-hour time frames. It has shown enough momentum, perhaps enough to push it back to the top of the range around 94.20.
However, stochastic has already reached the overbought level, indicating that Aussie bulls are running out of steam. If that’s the case, the pair might make another test of the range bottom before resuming its climb.
Going long at market with a stop below the previous low around 92.25 and a target of 94.20 would yield at least a 1:1 return on risk, which is good enough for a short-term trade.
By Kate Curtis from Trader’s Way