The Australian dollar versus the Japanese yen currency pair continued declining. But the bulls might be just around the corner.
Long-term perspective
After confirming the support of 71.09, the price entered an appreciation phase that extended to as high as 76.54. After that, the price confirmed 76.02 as resistance, pierced 73.93 and confirmed it as resistance, and then continued declining, puncturing 71.09.
After 71.09 was confirmed as resistance, the price further depreciated and then gapped. The price then extended to as low as 64.12 and even it recovered beyond 67.03, it could not hold the gains, as it continued falling until reaching the level of 64.12.
The candle on March 17, has a small body and long tails, suggesting that a pause or a change in direction might be coming. Because this candle appeared at an important level, 64.12, which also happens to be the technical correspondent of the 64.00 psychological level, it is possible to see the bulls joining the market.
One possible scenario is for the level to be falsely pierced. Another scenario, however, is to se repeated failed attempts to pierce the level. Of course, the third scenario is the one in which a bullish pattern forms. In all these scenarios the bulls eye the 67.03 level.
Only if the 64.12 level gives way and gets confirmed as resistance, then 62.52 would become the next target.
Short-term perspective
The price is under the trendline that starts from a swing which confirmed the inferior limit of the gap as resistance.
It is also limited by the resistance of 65.38 and the support of 64.05. The resistance level and the trendline form a double resistance area. In case of a strong appreciation, this area is very important, as its confirmation as resistance can send the price back to 64.05, making the possibility of a piercing very real, while becoming a support opens the door to 67.20.
On the other hand, if 64.05 gets pierced and confirmed as resistance, then the next psychological level — 63.00, not highlighted on the chart — may serve as a target. But, if 64.05 gets falsely pierced, then the aforementioned double resistance may be challenged.
Levels to keep an eye on:
D1: 64.12 67.03 62.52
H4: 64.05 65.38 67.20
If you have any questions, comments, or opinions regarding the Technical Analysis, feel free to post them using the commentary form below.
