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AUD/JPY - A Range Trade Idea

AUD/JPY has been consolidating after an early February rally from 88.21 to almost 93.

The consolidation range is roughly between 91.05 and 93. Both of these are "powerlines" or support/resistance pivots. 

Buying from Support:

Keep it simple. If market nears 93 with a stochastic 20 and RSI 40 (S20-R40) combination in the 4H chart, I am considering a buy. 

The 4H chart shows a tad bullish bias in the short-term because the RSI has tagged 70, and has remained above 40 - the reason why I would be looking for that S20-R40 combination.

However, a break below 91 given some elbow space should shift the market to bearish in the short-term.

(AUD/JPY 4H chart: click for full view)

Buying from Resistance:

The daily chart shows a larger degree of consolidation, though there is a slight bearish bias because the RSI tagged 30, but has been kept under 60. If price tests that 92.90-93 area again, with a S80-R60 combination, I will consider shorting. 

Also note the falling resistance projected from the Oct. 2013 high around 95.60. 

(AUD/JPY Daily Chart: click for full view)

I prefer the long in this scenario because of the swap. 

Anticipate Breakout:

Also, I will be getting ready to play the breakout. 

A break below 91 opens up 88.25, while a break above 93 opens up 94.50 then 95.60.