AUD/JPY has dropped to our buying area and bounced off perfectly. We remain bullish above the major support at 81.90 (Fibonacci extension, horizontal swing low support, bullish divergence) and we expect a strong bounce above this level to at least 82.90 resistance (Fibonacci retracement, horizontal swing high resistance).
Stochastic (34,5,3) is seeing strong support above the 8% level and also sees bullish divergence vs price signalling that a bounce is impending.
Correlation analysis: We're expecting overall JPY strength today in the USD/JPY and EUR/JPY pairs, hence it is best to exercise caution on this trade.
Buy above 81.90. Set stop loss at 81.67 and take profit at 82.90.
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