Technical Sentiment: Bearish
Key Takeaways
With buying pressure quickly dissipating after a failed attempt to stabilize above the resistance, traders are now determined to test AUD/JPY’s main support levels.
Technical Analysis
During the European session price rejected once again from 96.10. AUD/JPY is currently treading the support trendline which is currently priced at 95.69. The 50 and 100 Simple Moving Averages, based on the 4H chart, also offer support in this area, yet a continuation to lower levels is expected due to overbought conditions signaled by Daily Stochastic.
If AUD/JPY breaches the trendline and remains stable below it, traders will immediately target the next support area at 95.12. This level was an old pivot zone and it is currently strengthened by the 200 Simple Moving Average on the 4H chart (50-Day Moving Average as well). It is unlikely that price will drop below this area until Thursday, as traders will first require bullish JPY confirmations based on the Tokyo Core CPI, Household Spending and Retail Sales.
Free Reports:
If AUD/JPY will drop below 95.12 we can safely assume it is back in bearish territory. This will open the way towards 94.34, a pivot zone from May; followed by 93.50, where the 200-Day Moving Average will be located.
At least for now, lacking any major reports, bulls will no longer be in control unless the pair breaks the resistance and offers a firm Daily Close above 96.10.
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Prepared by Alex Z., Chief Currency Strategist at Capital Trust Markets
