Thanks to Australia’s weaker than expected jobs data, AUD/JPY finally broke below that short-term consolidation on the top of the falling channel on its 4-hour time frame. At the same time, the yen could continue to gain ground as risk aversion has been driving currency movements.
Stochastic is in the oversold region though, indicating a potential bounce, but this might only last until the top of the channel or the bottom of the box pattern.
Shorting at market with a stop above the channel or 100 pips and aiming for the bottom of the channel around 90.50 could yield a good return on risk.
By Kate Curtis from Trader’s Way