Currencies from the Antipodes have been performing pretty strong recently. AUD and NZD are in mid-term upwards trends on most of the pairs available on the market. In this piece, we will focus on AUDJPY, which gave us a proper buy signal yesterday.
It all started at the end of October, when the price created a double bottom formation on the horizontal support around 78.7. After this, the price reversed, ending the long-term downwards trend. On the 6th of November, AUDJPY broke the mid-term downwards trend line (red) and after this, created a flag pattern (blue lines). The flag is a trend continuation formation, so the breakout to the upside was expected. After defending the downwards trend line as a support twice, the price went higher targeting the upper line of the flag. The breakout happened yesterday and was relatively fast. That breakout, from the technical point of view, is a trigger to go long here.
Today, we have a small reversal, which is absolutely normal. The buy signal is ON as long as we stay above the upper line of the flag formation. If the price were to go back below, we would have a bearish sign, but this scenario is less likely to happen at the moment.