By: Mike Kulej
After getting ever stronger for a long time, the Australian Dollar is showing signs of cracking. Initially it seemed to be a case only in the AUD-USD pair, but by now, the charts of other AUD crosses are also suggesting lower levels ahead.
One of them is the AUD-JPY. This pair has been in an uptrend since May, but recently it lost the bullish momentum. The price made new high for the rally at 82.99, but it exceeded the previous high of 82.84 by only few pips. It since settled into a sideways direction, with bearish undertones.
On the intermediate term chart, the AUD-JPY is drifting towards the low established just before the latest high, which is at 80.35. It already tested that level twice, both times coming short. However, the price is under the 100 SMA and under the Ichimoku cloud, both bearish signs, suggesting further price deterioration.
This is supported by the MACD, which moved into negative territory, and the ADX indicator. The ADX started to turn up indicating possible new trend under way – a bearish one this time. Nevertheless, we still need to wait for the AUD-JPY to move under the 80.35 support. If that happens, the odds of a 200+ pips sell off will increase exponentially.
AUD-JPY Testing Important Support
DailyForex.com