AUD/JPY Forex Signal 10/11: Bulls Eye ¥110.70 (Video)

(MENAFN- Daily Forex) Potential signal:

I am buying at 109.50, with a stop at the 108.90 level, and a target of 110.70 above. The Australian dollar has been slightly bullish on Monday against the Japanese yen, as the interest rate differential continues to favor the upside.

AUD/JPY

The Aussie dollar has rallied a bit during the early part of the trading session here on Monday, as the ¥109 level continues to offer support. The ¥109 level is an area that's been important over the last couple of weeks, and the interest rate differential, of course, favors Australia.

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Furthermore, we also have to look at this as a market that is trying to judge two central banks as to where they are going. The Bank of Japan, although they say they're worried about inflation, the reality is they are light-years away from catching up to pretty much anyone. So, with that being the case, the Australian dollar, I believe, is favored against the Japanese yen as long as the carry trade comes back in vogue.

Not my first pick, but a reasonable one

While not necessarily my first currency that I would pick against the Japanese yen. It does set up for a nice little range-bound trade here, and that's essentially why I'm covering it today. It is at an area, by all means, looking very much oversold, and we did see a little bit of a bounce back on Friday.

EURUSD Chart by TradingView

So, at this point in time, on a break above the Friday candlestick, which is essentially ¥109.50, I'm willing to buy this and take advantage of both the interest rate differential getting paid at the end of every day, and then just the simple market-memory type of play

If we were to break down below the bottom of the candlestick from Friday, that could open up further selling, and I suspect you would probably see a Japanese yen move across the board where it's strengthening against multiple other currencies, probably not just this one. Nonetheless, I think this is an area of interest. It's a low-risk, reasonable-reward type of setup. Nice little range-bound trade.

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