By: Mike Kulej

The commodity currencies and in particular the Australian and New Zealand Dollars, have been appreciating strongly for some time now. Most of the gains were an outcome of positive fundamental news, seemingly supporting the global recovery. This is especially visible on the charts of the AUD/JPY, where even a short-term graph shows a 400 pips appreciation.
At this time, the Aussie-Yen looks overbought on technical basis. The MACD indicator is in divergence, a triple one, a situation that often precedes a more significant correction. However, at this point, the divergence itself becomes somewhat unreliable, so another signs of reversal are needed. For this chart, price breaking latest support, at 77.77, could be a good indication that it is heading lower.
The AUD/JPY remains very sensitive to all fundamental news. The large bearish candle that just formed was caused by weaker than expected Australian CPI. About 100 pips in one hour. Perfect example of how susceptible the Aussie is to news releases. Watching the latest lows should help determine the reversal of the trend. When it happens.