When you read the news these days it must make most currency traders feel like they are trying to pick the least worst currency to be a fan of. The trouble that I think that a lot of people face is the rapid direction changes that occur as the markets are driven to swing between ‘we will all be saved’ and ‘we will all be ruined’. As I said recently this is one of the major joys of dealing in the major cross rates. Not that they are immune to large and rapid swings in the market but not in the same broad strokes fashion you so often see when trading against the USD. With that in mind, the short-term traders amongst you may want to take a look at the hourly chart of the AUDJPY;
As you can see, the price has been moving neatly in an upward channel for several days now with the price pushing on the previous high. The upshot that the trader may be able to take from all of this is that you have a reasonably defined break to both the up and the down side.
Looking at the daily chart you can see that there is a channel starting to form as well at a nice sustainable angle – if you don’t like hourly charts then this may be one for the future.
I think this would have to be considered overall a broadly bullish setup. The channel is clearly heading upward and the previous resistance level was not something that you will find turning up repeatedly if you look back at the history of the chart. I would suggest taking a look at the 30 minute chart too – if you like volatility bands this may give you a clearer picture as they are starting to point higher now too. The rub is of course that the shorter the time interval the less currency stored in the direction of the moving averages.