Barclays recommended AUD/JPY shorts on Monday
On Monday, we brought you Barclays 'trade of the week'. It was to sell AUD/JPY.
Barclays trade of the week: Sell AUD/JPY
The absolute best trade in the FX market this week was short AUD/JPY.
They got the fundamental trigger wrong -- they expected a dovish RBA -- but they got the chart and price action right.
"Given the stretched condition of daily momentum studies, we would prefer to use counter-trend upticks as an opportunity to sell at better levels. A confluence of resistance in the 86.35 area provides nearby selling interest. A move below our initial downside targets in the 83.50 area would encourage our bearish view for a move lower in range toward next targets near 81.45."
The technical rational they showed was simple. It highlighted the 61.8% retracement of the Dec/Jan decline and the old mid-Dec low.
The pair is trading 275 pips below when they issued the call. The 83.50 level they mentioned was hit the next day and a retracrement to 85.50 was also a selling opportunity. AUD/JPY is trading at 82.82, 1.4 cents from their ultimate target.
A trade idea like this is definitely worth the price of a subscription to eFX Plus.
