AUD/JPY is on its way to the top of its long-term range, which can be clearly seen on the daily time frame. Stochastic is already indicating overbought conditions, which suggests that bears could push the pair back down sooner or later.

The resistance at the top of the range could hold since it lines up with the 94.00 major psychological level. Shorting at this level with a stop above the previous highs around 96.50 and a target at the bottom of the range around 88.50 could yield a high return on risk for a swing trade.

To maximize profits, one can add every 100 to 150 pips and trail the stop loss by the same amount.

By Kate Curtis from Trader’s Way