Trading Forex – AUD/JPY Coming Close to 90.00

With a massive bull-run over the last couple of weeks, AUD/JPY is currently trading at the 88.20 mark, quickly getting closer to the 90.00 level. Now for those trend-following traders out there, this will probably look like a very bad idea, but the 90.00 level is clearly a key level in terms of historical support and resistance; I believe this might be a good place to look for a possible short trade, and if nothing else, at least a good level to close your current long positions if need be.
Judging solely from a technical perspective, there is a good opportunity for a pullback before continuation, after a move like we have seen recently. In addition to this, the pair is as mentioned above, running into some serious resistance around this level, where we are likely to see at least a bounce.

One thing to keep in mind is that by going in on a short trade you clearly have the roll rates against you as you will be selling a high-yielding currency and buying the opposite. However, I think we are likely to see a strong bounce and that should make up for any swap costs.


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