Potential Correction in AUDJPY Following Rally Towards High SuppAUDJPY has shown strong performance since early February 2024, experiencing a significant rally from the level of 95.640 to reaching today's high at 99.024. However, this movement has brought the currency pair into the territory of the highest supply level. With this condition, there is potential for AUDJPY to undergo a temporary correction.
Technical Analysis:
On the daily chart, it can be observed that AUDJPY has reached a significant resistance level around 99.024, which is the current highest supply level.
The RSI (Relative Strength Index) indicates overbought conditions, suggesting that this currency pair may have moved too far beyond its short-term fair value.
There is potential for the formation of a bearish reversal pattern such as a double top or shooting star around the current supply level, adding validity to the correction prediction.
Projection:
Taking into consideration the above factors, AUDJPY is likely to undergo a minor correction towards the level of 97.737 in the coming sessions. This could present an opportunity for traders to take short-term profits or to seek entry points for short positions with correction targets. However, it is important to monitor market developments closely and set appropriate stop losses to manage risk effectively.
