- April 14, 2022
- Posted by: Tradingshot Articles
- Category: Forex
The AUDJPY pair has given a clear medium-term bearish signal. The 1D RSI got rejected late last month within its multi-year Resistance Zone with the price initially reacting with a pull-back but has since recovered and turned neutral.
Every time that the price hit the 1D RSI Resistance Zone since 2020, it pulled-back to at least the previous Fibonacci level: In June 2020 it pulled-back to the 0.0 Fib from the 0.5 Fib, in February 2021 it pulled-back to the 0.5 and then even 0.0 Fib from the 1.0 Fib. Finally in October 2021 it pulled-back from the 1.0 Fib straight to the 0.0 Fib.
Right now, it is trading on the 1.5 Fibonacci extension level. Naturally we are expecting a pull-back on a two month horizon to the 1.0 Fib at least. A monthly candle closing below it, can even kick-start a deeper correction to the 0.5 Fib. This is a great low risk trade for swing traders.