AUDJPY broke the uptrend line. Is it time to sell?
The AUD/JPY pair recently made a significant break on the daily chart. The price broke through two significant zones:
1. The uptrend line, which has been supporting prices since August 2024.
2. The sideways range, between 99.70 and 102.00, which had served as a consolidation area for several weeks.
These breakouts indicate a loss of buying momentum, with sellers taking control of the market. Currently, the price is at 98.15, below the 50% Fibonacci retracement of the recent upward movement, with the 38.2% retracement (97.44) as the next intermediate support.
Bearish Continuation Forecast
With the loss of support at 99.70, if the price comes back to the breaking point at 99.50 and it works as a resistance, the downward movement should continue, especially since the breakout was accompanied by a large-bodied daily candle, indicating sellers' conviction. If the price loses the 38.2% Fibonacci retracement at 97.44, the next targets would be:
94.60 - Target projected by the 23.6% Fibonacci retracement, in addition to being a significant psychological zone.
90.00 - A long-term support, marked by the low of the July 2024 bearish movement.
This scenario will be reinforced if buyers fail to defend the next support zones.
Possibility of Retracement, an Alternative Scenario
Although the breakout indicates weakness at the moment, there is a possibility of a pullback to retest the 99.70 region or the broken uptrend line. If price manages to break above this level, there is a chance that the AUDJPY will resume the uptrend. In this case, the short-term targets would be:
102.00 - Former resistance and the top of the lateralization.
104.75 - An important level that acted as resistance in May 2024.
For the price to initiate a stronger reversal, a sustained breakout above 100.00 would be necessary, which would cast doubt on the strength of the sellers.
The AUD/JPY presents a dominant bearish outlook after the recent breakouts. The next critical zone will be the support at 97.44, which will determine whether the price will continue its downward trajectory or make a pullback to retest the broken levels. This is a crucial time to observe the price reaction at the support and resistance zones, seeking confirmation for both scenarios.
Disclaimer:
74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not necessarily indicative of future results. The value of investments may fall as well as rise and the investor may not get back the amount initially invested. This content is not intended for nor applicable to residents of the UK.
1. The uptrend line, which has been supporting prices since August 2024.
2. The sideways range, between 99.70 and 102.00, which had served as a consolidation area for several weeks.
These breakouts indicate a loss of buying momentum, with sellers taking control of the market. Currently, the price is at 98.15, below the 50% Fibonacci retracement of the recent upward movement, with the 38.2% retracement (97.44) as the next intermediate support.
Bearish Continuation Forecast
With the loss of support at 99.70, if the price comes back to the breaking point at 99.50 and it works as a resistance, the downward movement should continue, especially since the breakout was accompanied by a large-bodied daily candle, indicating sellers' conviction. If the price loses the 38.2% Fibonacci retracement at 97.44, the next targets would be:
94.60 - Target projected by the 23.6% Fibonacci retracement, in addition to being a significant psychological zone.
90.00 - A long-term support, marked by the low of the July 2024 bearish movement.
This scenario will be reinforced if buyers fail to defend the next support zones.
Possibility of Retracement, an Alternative Scenario
Although the breakout indicates weakness at the moment, there is a possibility of a pullback to retest the 99.70 region or the broken uptrend line. If price manages to break above this level, there is a chance that the AUDJPY will resume the uptrend. In this case, the short-term targets would be:
102.00 - Former resistance and the top of the lateralization.
104.75 - An important level that acted as resistance in May 2024.
For the price to initiate a stronger reversal, a sustained breakout above 100.00 would be necessary, which would cast doubt on the strength of the sellers.
The AUD/JPY presents a dominant bearish outlook after the recent breakouts. The next critical zone will be the support at 97.44, which will determine whether the price will continue its downward trajectory or make a pullback to retest the broken levels. This is a crucial time to observe the price reaction at the support and resistance zones, seeking confirmation for both scenarios.
Disclaimer:
74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Past performance is not necessarily indicative of future results. The value of investments may fall as well as rise and the investor may not get back the amount initially invested. This content is not intended for nor applicable to residents of the UK.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.