How To Make AUD/JPY Bring You Money

Hello Friend!

This time we will consider AUD/JPY. This asset is very interesting because in the long term it is in a lateral movement, after moving along the trend. We have already learnt that lateral movement implies a rather high certainty of the success of trading decisions.

Picture 1. The graph of the ratio AUD/JPY from 01/01/2018 to 12/18/2018.

As can be seen in Picture 1, the price is currently in a side corridor and wide enough, which implies a good margin of safety for using the strategy. However, in Picture 1, we also see that there are two support lines, which means that instead of further falling, a rebound on growth is possible. At the same time, we see that AUD/JPY is just at the point where support occurs. To resolve such uncertainty, we use the opinion of major traders. Consider the price chart for the last month in Picture 2.

Picture 2. The graph of the ratio AUD/JPY from 11/18/2018 to 12/18/2018.

We see in Picture 2 that the price is now on the support line, however, it is also clear that after the previous support, the price has not gone so far up. It indicates deficiencies in the growing strength of the asset, or bearish pressure on the quote, which indicates a more likely further reduce the quotes. Also, consider how large traders look at the future, in Picture 3.

Picture 3. The AUD/JPY ratio chart from 11/18/2018 to 12/18/2018 with the chart of the major traders' index.

In Picture 3 it can be seen that the decrease in the volume of active positions leads to an active reduction in the value of the ratio. It is also clear that after the last rebound from the resistance line, the net volume of the traders' positions in the market has not grown, which can also be considered as a bearish mood in the AUD/JPY ratio. In this regard, we assume that in the future we can expect a reduction in the value of AUD/JPY, which means opening and increasing positions downwards.