AUDJPY Reversal Pattern

[ChartSecret]

AUDJPY has formed a Broadening Megaphone chart pattern - which is a strong reversal pattern that usually leads to a breakout downwards. This pattern consists of two expanding trend lines that suggest that the trend is not symmetrical (as in Channel, whose trend lines are parallel).
Pattern is also confirmed by strong Resistance at 80 which is close.

Trading:
Short trades will be issued on the breakout of the megaphone, and on pullback to the Support trendline.

Analysis Source:
http://www.chartsecret.com/content/a...-chart-pattern

[Pinalli]

Something strange has been happening in the Forex market that is rarely seen; the AUD and JPY have both been rallying at the same time.

According to historical data, this trend is unsustainable - these currencies normally lie at the opposite end of the risk appetite spectrum.

The JPY is gaining on comments from the incoming administration that suggest a lack of concern over the strong JPY, while the AUD seems to be the most popular currency to buy in the new USD carry trade.

AUD is winning the race against the JPY over the last couple of days, and if risk appetite stays robust while bond yield rise a bit more, then we could be in for a retest of that 80.00 area again. If equities do reverse and start to fall however, look out below....

[AutoTrader]

Whats wrong with AUD\JPY ralling at the same time? What you are saying is inaccurate. Look at the daily-chart: After a big double bottom AUD\JPY has been rising continuously since the beginning of 2009.

[Enivid]

Originally Posted by AutoTrader

Whats wrong with AUD\JPY ralling at the same time? What you are saying is inaccurate. Look at the daily-chart: After a big double bottom AUD\JPY has been rising continuously since the beginning of 2009.

Read carefully, Pinalli is saying that both AUD and JPY are rallying at the same time, not AUD/JPY currency pair (which would mean rising AUD and falling JPY).

[AutoTrader]

Originally Posted by Enivid

Read carefully, Pinalli is saying that both AUD and JPY are rallying at the same time, not AUD/JPY currency pair (which would mean rising AUD and falling JPY).

I understood what he meant, and it is incorrect.
If AUD and JPY are rallying at the same time the AUD\JPY should be flat, and it isn't. On the contrary, it is rising very strongly. Weekly chart shows the reason for the rising of AUD and the falling of JPY.

[Enivid]

Originally Posted by AutoTrader

I understood what he meant, and it is incorrect.
If AUD and JPY are rallying at the same time the AUD\JPY should be flat, and it isn't. On the contrary, it is rising very strongly. Weekly chart shows the reason for the rising of AUD and the falling of JPY.

First, there is no reason for AUD/JPY to be flat when both AUD and JPY are rallying. The AUD, for example, can grow faster than JPY and then AUD/JPY would be rallying too, even if JPY is growing against other currencies.

Second, AUD/JPY is in a sideways jigsaw since mid-August. And both AUD and JPY are growing against the USD and GBP for at least a month or so.