AUDJPY - what next?

Good Morning Traders

Hope you all had a great weekend and are ready for another week of dynamic trading.

The AUDJPY has been in an up trend since Feb 09 and admittedly it's had some sizable breathers but overall the trend direction is up - the VI confirms that for us with it pointing upwards.

As you can see, price is being propped up by the support of the TL and I'm sure the strength of the VI below is also playing its part. The ST is giving up false bars on top and overall the uptrend still looks good. Now looking more closely at the price action, there is a possibility of a 123786, but this won't be confirmed until we have a BOB of the 2. But price has a number of barriers to break should it play out this chart pattern - we have the TL, VI, RN and a fib breather level all huddled together acting as a strong support. So caution should definitely be taken on any reversal trades.

Scenario 1: we could see the 123786 take form and see price break down.

Scenario 2: we see price bounce up and try to continue with it's current trend. Depending on your trading style, a trend trading entry could be taken soon or to play it safe await a BOB of the high.

As of this morning buyers are taking lead, but let's keep a watchful eye on this pair.

Have a great trading day.
Sonia Molina