Aussie Dollar vs Japanese Yen Technical Forecast
- Bulls give up control
- AUD/JPY faces a crucial support level
Bulls Pullback
On Tuesday, AUD/JPY printed its highest level in over five weeks at 69.26 then retreated after as some bulls seemed to cut back. On Friday, the weekly candlestick closed with a Doji pattern reflecting the market’s indecision at this point.
This week, the Relative Strength Index (RSI) fell from 55 to 49 indicating the end of uptrend move.
AUD/JPY DAILY PRICE CHART (JUn 1, 2018 – April 21, 2020) Zoomed Out
AUD/JPY DAILY PRICE CHART (FEB 1 – April 21, 2020) Zoomed IN
Looking at the daily chart, we noticed that on April 8 AUD/JPY climbed to the current trading zone 67.18 – 70.21. However, the price failed on multiple occasions to overtake the 50-day average then pointed lower eyeing a test of the low end of the zone.
A close below the low end of the zone may encourage bears to press towards 64.08. Further close below that level could send AUDJPY even lower towards 61.67. Having said that, the weekly support levels and area marked on the chart (zoomed in) should be considered.
On the flip side, any failure in closing below the low end of the zone may cause a reversal towards the high end of the zone. Further close above that level, could extend the rally towards 71.87. Nevertheless, the weekly resistance levels underscored on the chart should be watched closely.
AUD/JPY Four-Hour PRICE CHART (March 24 – April 21, 2020)
From the four- hour chart, we noticed that yesterday AUD/JPY broke below the uptrend line originated from the April 8 low at 66.48 generating a bearish signal. Today, the price has produced another bearish signal after violating the neckline of the double top pattern located at 67.57.
A break below 65.57 could send AUDJPY towards 64.38. In that scenario, the weekly support level underlined on the chart should be monitored. In turn, any break in the other direction i.e. above 68.94 may cause a rally towards 70.21. Although, the daily resistance level printed on the chart should be kept in focus.
See the chart to find out more about key levels Cable would encounter in a further bearish /bullish scenario.
Written By: Mahmoud Alkudsi
Please feel free to contact me on Twitter: @Malkudsi
