AUD/JPY low volume pull back on the 4-hour time frame coinciding with technical signals.

Bearish engulfing pattern closed on Friday signaling the entry for AUD/JPY to target the lower Bollinger band as low as 74.200.

Key Points:

• 4 Hour – Shooting star above Bollinger band
• 4 Hour – Price below 50 EMA
• 4 Hour – Price below 200 EMA
• 4 Hour – Low Volume
• 1 Hour – Price below 200 EMA
• Bearish engulfing pattern

Key Levels:
Support – 74.350, 50 EMA, 74.200
Resistance – 74.790, 200 EMA
 
Entry Zone:
Optimal entry provides the greatest reward to risk ratio while supporting entry is a zone for reversal signals.
Optimal Entry – 74.690
Supporting Entry – 74.640
 
Candle Reversals for entry

• Bearish Shooting Star
• Bearish Engulfing
• Bearish Dark Cloud Cover

 
The Risk:
As traders, it is your job to mitigate the risk and only trade structures that provide high probability and great reward to risk ratios.
If you are not comfortable with defined exit levels, experiment with Moving Averages to help set solid exit rules to protect your capital.
 
IF: Price breaks above 74.854 level and violates 200 EMA – this would suggest the structure is not in our favour and would be wise to reduce exposure or close the trade until a solid signal gives us reasons to re-enter.
 
Reward / Reward Targets:
Optimal Entry 74.690 – Target 1 74.350 = 2x Reward to Risk
Optimal Entry 74.690 – Target 2 74.200 = 3x Reward to Risk
Supporting Entry 74.640 – Target 1 74.350 = 1.2x Reward to Risk
Supporting Entry 74.640 – Target 2 74.200 = 1.8x Reward to Risk