AUDJPY Potential long setup
Overall trend is an uptrend. Most recent broken level is resistance now turned support at the 76.05 area, Expecting a retest of that key level. In retesting, it is quite probable that price can come down to slightly break below 76.05 area to find support at 200MA before continuing upwards. This retesting move can trigger a chain reaction to generate fuel for the up move by stopping out traders who bought this break and set their SL below the previous resistance now turned support area. Being in loss, a good number of such traders will close their losing buy positions which becomes sells that will drive the price even lower below the support area, eventually hitting several SLs. After finding support at 200MA which is below 76.05, if price resumes its up move, this will be another drama (the part 2 of said 'chain reaction') for traders who shorted the pair immediately after a break below of 76.05 and set their SL above it. These traders being in a losing position and will close their sell position, which becomes a buy! When price eventually breaks above 76.05, the SL of traders that didnt close their sell positions will be hit, generating more buy fuel for a massive push to the upside. I will wait to see what price wants to do when it comes back into the key level area. When I see indications of a resumption of up move, then will I buy.
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