AUD/JPY: Looks like a ‘sell-break’ set-up
I think the market is looking to get short the AUD but hasn’t really even started yet (in fact latest IMM data shows the market is still long although Prime Brokers say that the big global macro funds have already started to build short positions).
A quick look at the AUD/JPY daily chart shows a strong line of support across a number of daily lows but if this line breaks, I think we could see a sharp vertical fall towards 75.00. I’m looking to sell smalls on a break below 79.60, 79.40 and again below 79.20. I’m normally not a big fan of selling breaks but I think this is one trade where momentum could really pick up once the break happens.