Its Halloween after all.
The candy bowl is ready for the trick or treaters who will be knocking on the door in a few hours. I hope they get here soon. The bowl is losing a bite size bar from time to time and I don't need it (in fact it is off to the gym before the trick or treaters start to arrive).
One of my favorites candy bars is a Reeses Peanut Butter Cup which brings peanut butter and chocolate into one. Of course there are also Snickers bars (peanuts, caramel and chocolate), Almond joys (almond, chocolate and coconut), York Peppermint Patties (mint and chocolate) and Milky Way (caramel, nugget and chocolate).
Well in the new day, we have interest rate decisions from the RBA and the BOJ and that combination could have implications for the currency combination - the AUDJPY. Will it be a treat for your trading account?
So what technical levels are in play for the pair?
Looking at the daily chart (see chart above). the pair had been modestly moving higher in October. The move higher took the price above the 100 day MA earlier in the month at 77.789. That level held support.
The high stalled near the 200 day MA at 80.082. The high price last week squeezed above that 200 day MA for the first time since the end of April. Even at that time (in April that is), the time spent above the 200 day MA was limited. You have to go back to June 2015 to get to a period where the price traded, and stayed above the 200 day MA for an extended time period. With the current price at 79.70 we are within 36 pips of that key level. That is a key level. It held resistance last week. It remains a key level today/this week.
Needless to say, if the price is able to get above the 200 day MA - and stay above it - there should be additional upside momentum.
On the downside, if things get going, the 100 day MA is not really that far away at the 77.87 level The last time it traded at the level was on October 11. So in addition to the level not being that far away, the time since it last traded below is also not that long ago.
Drilling down and looking at the 4-hour chart below, there should be some other clues before the level is reached.
First, the price action at the end of Friday and early today took the price below trend line support. That fall stalled near the 100 bar MA on the 4-hour chart (currently at 79.25). A move below that level should solicit more selling on a break.
Other target below that will include:
- the 38.2% at 78.64,
- the 200 bar MA on the 4-hour chart at 78.28 and
- the 50% at 78.133.
Those would be the steps on a downward fall.
Now both the RBA and the BOJ are expecting to do the same thing - nothing. So getting a surprise is not the odds on favorite. Nevertheless, there are some technical levels in play that might make for a technical trade - higher or lower - a tasty treat for your trading account.
Be aware. Be prepared.
