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Currencies AUD Top Trade Idea For December 2nd, 2014 – AUD/JPY

Today, we will take a look at AUDJPY, which has been in nice and strong uptrend for the past few weeks. But what I spotted lately is a five wave decline from the high. This is always very significant, and important information as it tells me that something is changing. So even if trend has turned bearish for just a short-period of time, I see room for more weakness as every correction is stricture by minimum three legs. Well, notice that on hourly chart there is a one completed leg down that has unfolded in five waves. And then price moved sideways, which I see it as a corrective pause within on going new weakness. So I suspect that market will break to a new low. Based on minimum expectations we are looking through 99.88, so there is opportunity on the short side, maybe with a solid risk/reward set-up if market will retest 11.30/101.60 area once again.

AUDJPY

In the last couple of sessions we have also seen some bearish pressure on stocks, which could cause even more downside pressure on AUDJPY as markets are correlated. In fact, AUDJPY is the weakest pair compared to other yen-crosses so if stocks will make a pullback from the highs, then AUDJPY can be interesting pair for shorts.

Market Correlation

market correlations

AUDJPY trade idea:

Entry #1 (Sell Limit): 101.40
Stop Loss: 102.50
Target : 98.50

#move stops to breakeven if price reaches risk/reward 1:1

#Cancel order if AUDJPY will break beneath 99.90

 

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About Gregor Horvat

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Gregor Horvat, based in Slovenia, has been in the forex markets since 2003. He is a technical analyst and individual trader who has worked for Capital Forex Group and TheLFB.com. He also is founder of forex services on www.ew-forecast.com. EW-Forecast.com provides technical analysis of the financial markets, highlighting behavioral patterns based on the Elliott Wave Principle (EWP). Website: http://www.ew-forecast.com/ TryEW-Forecast.com’s Services For 14 Days for just €1 at http://www.ew-forecast.com/service .

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