Like many of the currency pairs relative to the Yen the AUD/JPY has had a drastic fall since July of 2008.  The AUD/JPY had a drop from over 100 to under 60, by all account a very significant fall.  Things look like they may have changed however looking at the 1% point and figure chart.

You can see on the chart below that several things are happening to confirm the change in trend.  First and most obvious is the trend line break.  It has now had 2 buy signals above the trend line which further confirms the change in trend.  Another confirmation is the consecutive higher highs and higher bottoms indicating that the momentum is now upwards.

Having confirmed that the trend has changed it is now time to look at entering a position.  On the chart below you can see that I am waiting for the pair to pull back so that I can make an entry at the 62.15 mark.  This is very conservative entry point right now and if the pair makes a new high above 65.30 before a pull back to 62.15 then I will look to move the entry point up around 62.76.

The stop loss will be placed at 60.90 which would be break of the trendline and a sale signal past two levels of previous support.

If you like my forex investing ideas and technical analysis be sure to check out the other post on our forex investment blog and learn more about investing in our managed forex account.