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Does #AUDJPY follow the stock markets?
In today’s video, we highlight the relationship between the currency pair and the stock market and how you can use one to trade the other.
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Hi guys, welcome to today’s video update with me John Kibbler Head Currency Analyst at Blueberry Markets.
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In this video, we’re going to look at AUD/JPY. This was on our Blueberry Jam to go long last night. Unfortunately, we didn’t get the initial retest. So, we placed an order to see if we would get the retest. It didn’t happen, and the market has pushed to the upside, but it doesn’t mean that the trade is over. We could still be looking for a continuation over the next couple of days.
What I’m expecting is for the markets to retest these weekly swing highs, here. We can see that the market is forming higher highs and higher lows and now we’ve broken out of recent swing highs.
We could be looking for a pullback into this previous structure area, where we look for continued long positions. So, looking at the four-hour timeframe, we can see that the market is pretty much taken off to the upside. But what we want to see is for the market to start retracing before it hits this area of resistance.
What I want to see is some bearish candlesticks coming into play. Even if we do get a couple of bearish days, I want to see the market retest these previous structure highs through here. And you can see the market has acted as resistance at this point, so I’m expecting buyers to re-enter the market if we do get that retracement that we’re looking for. So, I want to see a pullback; then I want to see some double bottom pattern, some inverse head and shoulders, anything that suggests that buyers are coming back into this market. I want to be looking for buying opportunity down here, with the targets at the 76.40 level.
Now, the price has taken off to the upside. If you want to look for earlier positions, you can look for intraday positions on a pullback. You can see this little hourly area here, for instance, or wait for a pullback down into the zone. But if you are looking for those, I’d be looking at 5-minute changes in cycle, down here. But other than that, what I want to wait for is that longer-term opportunity, that midterm swing trade. If the market comes back down there, I’ll look for changes in the cycle for a buying opportunity.
I quite like the idea of buying this. It seems to be that the stock markets are taking off again. And if we look at the Dow, for instance, we can see on the daily timeframe that the market is pushing to the upside.
If we look at the DAX as well, the markets are pushing to the upside. I did have a question about the DAX: saying that I traded DAX every single day on an intraday trading strategy. Still, I don’t cover these markets on the YouTube channel because if you’re new to trading, I will look at currencies then the stock markets, but it doesn’t mean it can’t help you trade currencies when the stock markets are rallying to the upside.
We’ve talked about risk-on, risk-off in the past. When the stock markets area is rallying, we’re looking at our risk currencies to gain value. The AU Dollar, the CA Dollar and the NZ Dollar will typically gain value when the stock market is pushing to the upside because they’re considered risk currencies. Then you’ll see the JP Yen and the Swiss Franc and the US Dollar losing value typically when the stock markets rally—looking for those to continue.
So, AUD/JPY is the perfect risk currency pair. It reacts well. You can probably see there where, if you look at the – let me compare on AUD/JPY, and I’ll grab the DAX, you’ll see, it will pop onto the screen – you’ll see how well that tracks and compares to the stock market. You can see the bottom here in the stock market, which is in orange and the rally up, we can see the same happening with AUD/JPY. Perfect risk-on pair. We can see that the DAX is pushing to the upside. We would be looking to buy AUD/JPY.
If you don’t want to trade the stock markets, you can trade the risk currency pair, and it will act pretty much in the same way.
With regards to the question about the DAX, you can look at it in two ways. You can either trade the stock market, which is a bit more I would say for the advanced people in the Forex Markets. If not, go and look at your risk pairs, like AUD/JPY, they have a lower cost to entry and things like that.
Please take a look at this, and it’s a little bit of comparison. When the stock markets typically do rally, you want to be looking to buy AUD/JPY. When the stock markets are falling, like this instance here, you want to be selling AUD/JPY, pretty much daily.
I hope that clears things up, and I hope that makes sense. If you want to see more comparisons like this, let me know in the comment section below. I’ll check that out. But expect AUD/JPY to continue to rally in ling with the stock markets.
Thanks for watching. I’ll catch you in the next video.
Try trading AUD/JPY with zero risks by using a demo account. Blueberry Markets offers a free demo account with up to $50,000 funds to practice trades with. Enjoy low spreads, quick executions, and personalised customer support when you trade with a live account — that’s the Blueberry Markets experience.

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