AUD/JPY Candlesticks and Ichimoku Analysis

Weekly

  

•    Last Candlesticks pattern: Shooting star 
  
•    Time of formation: 13 Mar 2017 
  
•    Trend bias: Down



Daily
  

•    Last Candlesticks pattern: Bearish engulfing pattern 
  
•    Time of formation: 16 Feb 2017 
  
•    Trend bias: Near term down





The Australian dollar did meet renewed selling interest at 85.75 (we recommended in our previous update to sell aussie at 85.70 and a short position was entered) and has dropped in line with our bearish expectation, our short position met downside target at 83.70 with 200 points profit, as this anticipated selloff has kept the pair under pressure, bearishness remains for recent decline from 88.15 top to extend further weakness to 82.00 and possibly towards support at 81.10-15, however, near term oversold condition should limit downside and reckon 80.00 psychological support would hold from here, bring rebound later.

On the upside, whilst initial recovery to 83.00-10 cannot be ruled out, reckon the Tenkan-Sen (now at 83.83) would limit upside and bring another decline to aforesaid downside targets. Only a daily close above the Kijun-Sen (now at 84.70) would abort and suggest low is formed instead, risk a stronger rebound to 85.00-10 but said resistance at 85.75 should remain intact, bring another decline later this month.  



Recommendation: Our short position entered at 85.70 met target at 83.70 with 200 points profit and would sell again at 83.65 for 81.65 with stop above 84.65.

On the weekly chart, the pair has continued heading south throughout since the beginning of last week and broke below support art 83.75, adding credence to our view that top has been formed at 88.15 and consolidation with downside bias remains for the retreat from there to extend weakness to the upper Kumo (now at 81.61), then towards support at 81.10-15, however, a weekly close below latter level is needed to retain bearishness and suggest the rise from 72.50 has ended, then further fall to 80.50 and possibly psychological support at 80.00 would follow but the lower Kumo (now at 78.65) should remain intact.

On the upside, although recovery to 83.00-10 is likely, reckon upside would be limited to 83.60-70 and bring another decline. Above 83.70 would risk a stronger rebound towards 85.05 (last week’s high and current level of the Tenkan-Sen), however, only a weekly close above resistance at 85.75 would abort and signal low is formed instead, bring further subsequent gain to 86.00 and then 86.50-60, however, price should falter below resistance at 87.50.