The Australian dollar versus the Japanese yen currency pair is in a very interesting spot, one from where it could go either way and so establish the course for the long-term.
The ascending trend that started after the false piercing of the 71.09 support evolved in a very convincing manner, peaking at 76.54, just above the 76.02 level.
The fact that the peak at 76.54 is part of a false break was, of course, welcomed by the bears, as they pushed the prices towards 76.93 with a lot of determination. But as they reached the level, the bulls surprised them with a strong retracement.
The retracement crystalized an appreciation all the way back to the 76.02 level. However, the bulls were not able to exceed its boundaries. This is a sign of the bearish determination in guarding this resistance.
But as the first bearish reaction — even if dim — occurred, on January 15, a very interesting thing also took place. The low of the January 15, is confirming an intermediate level which can be easily traced by referring to the peak of 75.67.
So, from this perspective, the bearish reaction was countered by the bulls. But still, the bulls are not yet taking effective action and as time passes the market prints — at an important resistance area — a lower high, with respect to 76.54.
Therefore, in such cases, salutary is the conservative approach. As a conclusion, as long as the bulls miss the opportunities to conquer 76.02, the main focus is 73.93. On the other hand, if 76.02 is checked, the bulls will have their eyes on 77.51.
The appreciation that started at 73.90 is now facing the 75.99 resistance, the price being part of a consolidation phase supported by 75.62.
As long as 75.62 is confirmed as support — or falsely pierced — the expectation is for the price to reach 76.34 and then 76.69.
But if 75.62 gives way, a first target is represented by 75.33. The latter level, in the light of those discussed previously, could spark an appreciation by which the bulls regain 75.62, with the resulting outcome.
However, if 75.33 is not able to sustain the bearish weight, then 73.90 is an expected area to be revisited.
Levels to keep an eye on:
D1: 76.02 73.93 77.51
H4: 75.62 76.34 76.69 75.33 73.90
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