Today’s chart of the day is brought to us by Technician and Author Adam Grimes. I’m a newcomer to Grimes’ blog but I’ve learned quickly that it is a must read for technicians. I suggest adding this one to your preferred feed.
This morning he brings up a great chart with some serious implications for risk assets. If Grimes is right and this indeed is a bullish pattern, look for stocks and commodities to follow higher. I would then expect further downside pressure in the US Dollar, Treasuries, and the $VIX. But keep an eye on this 77-79 area where Grimes suggests keeping a stop. Lower lows in this currency cross would nullify the bullish implications and would force us to get much more defensive in general.
“This is potentially a very bullish pattern on the AUDJPY, targeting a move into the high 87′s over the next several weeks. Trades should be entered on strength above the trendline (roughly 82.00 in today’s trading) against a stop somewhere in the 77.00-79.00 area. (Remember, a closer stop is more aggressive.) Initial profits could be taken at a point equal to one times the initial risk on the trade, with further reductions as the trade plays out.”
Keep up the good work Adam! Love the blog.
Tags: $FXA $FXY $AUDJPY