AUD/JPY: Ranging within a Bearish Flag Makes Traders Wait

• The pair is in range on the H4 chart
• Simple Moving Average 30 has been flat for a while
• Intraday price action may get bullish later today
• The pair may end up producing a bullish candle on the daily chart

AUD/JPY Searches for its Direction

The pair has been choppy on the H4 chart for a while. The pair did not make a significant move from where traders could find a direction. The H4 chart shows that the price gets trapped within a bearish flag. As of writing, it trades at the support. Simple Moving Average 30 has been flat. However, the price stays above SMA 30. Thus, the price may make a move towards the North. Since the flag’s resistance is not too far, the Bull may not generate that much of momentum. A bullish breakout above the flag’s resistance may attract more buyers and the pair may get more liquidity to push the price towards the North. On the other hand, a bearish breakout at flag’s support may drive the price towards 92.825.

The H1 Chart Finds a Support

The pair found its support around 93.500 several times. It had a bounce at the very beginning of its trading day today. Later on, it had another bounce and produced a bullish engulfing candle. This suggests that the level may play a crucial role for intraday traders. Intraday buyers may look to go long above the level. On the other hand, if the price breaches the level, the sellers may look to go short in the pair. Since the H4 is very indecisive, it may hold intraday traders back to keep their close eyes on the pair to look for trading opportunities.

The H4 and the H1 chart both need time to show a clear direction. It is the last trading day of the week. Thus, the pair does not have enough time make a move and consolidates for the traders to offer entries on the H4 chart. The H1 chart may end up offering some entries. Traders need to be very cautious before taking entries on such chart. Minor intraday charts such as 5M/15M may offer entries with lucrative risk-reward though.

Written by: Md Tareq Sikder, Senior Analyst Forex Prop News

Contact and follow Tareq on Twitter: @tareqfpn