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
AUD/JPY – 88.65
As aussie found support at 87.25 earlier this month and has rebounded, suggesting consolidation above this level would be seen, however, as long as 89.10-20 holds, mild downside bias remains for another retreat, below 87.75-80 would suggest the rebound from 87.25 has ended, bring retest of this level, break there would signal another leg of decline from 90.30 top is underway for weakness towards support at 86.60. Looking ahead, a break below there is needed to add credence to our bearish view, bring retracement of early upmove to 86.30-35 and possibly towards 86.00, having said that, support at 85.70 should remain intact, bring rebound later.
On the upside, whilst initial recovery cannot be ruled out, as long as 89.10-20 holds, prospect of another decline remains. Above said resistance would abort and suggest the first leg of decline from 90.30 top has ended, risk a stronger recovery to 89.65-70 but price should falter below said resistance at 90.30, bring another leg of corrective decline later.
Recommendation: Hold short entered at 88.20 for 86.20 with stop above 89.20
On the weekly chart, aussie found support at 87.25 and has rebounded, however, reckon upside would be limited to 89.10-20 and 89.65-70 should hold, bring another retreat later. Below said support at 87.25 would suggest a temporary top has possibly been formed at 90.30 and consolidation with mild downside bias would be seen for weakness to 86.70-75 and possibly towards support at 85.70, however, only a drop below support at 85.45 would add credence to this view, bring retracement of recent upmove to 84.95-00, then test of 83.75 (previous support level) which is likely to hold and price should stay above support at 82.55-60, bring rebound later.
On the upside, although initial recovery 89.00-10 cannot be ruled out, reckon upside would be limited and 89.65-70 should hold, bring another retreat later. A break above 89.65-70 would signal the pullback from 90.30 has ended, bring retest of this level first. Only a break of this resistance at 90.30 would extend recent upmove to previous resistance at 90.70 and possibly towards 91.50-60 but price should falter below another previous chart resistance at 92.70, bring correction later.
