The Australian dollar versus the Japanese yen currency pair may be heading towards the north. Is this just a bearish opportunity to get better shorting prices?
From the peak of 76.54, after the price confirmed 76.02 as resistance, a strong depreciation took place, one that crossed important support levels without much difficulty. The fall was so pronounced that, aside from gapping, it printed the low at 59.87.
But from 59.87, the bulls made an important retracement, managing to get the price back above the level of 64.12, a very important support. So, as long as the price sits above this level, further development towards the upside is possible.
The first bullish scenario is the one in which the price continues to head for 67.03 without any other consolidations. However, the second scenario offers credit to a more slow-paced appreciation or at least one that works on accumulating the buyers’ trust. In this latter scenario, the price could make a throwback towards 64.12, and only after it confirms it as support to further continue the appreciation.
If, however, 64.12 gives way, then the bears might push the price to 62.52, from where the bulls could try to reorganize themselves. But if the bulls would not manage to reconquer 64.12, then the market could start a consolidation that prepares further depreciation.
The price pierced the trendline that starts from the resistance level that also represents the lower boundary of the gap.
This was a first step from the bullish side, but the price is still contained inside a range limited by the support of 62.78 and the resistance of 65.38.
One possible outcome is for the price to throwback so it confirms the trendline and the level of 64.05 as a double support. In this case, the first bullish target would be 65.38, followed by 67.20.
A second possible unfolding is for the price to jump above 65.38 and confirm it as support. In this case, the same 67.20 would play the role of the target.
However, if the price gets back under the trendline, thus failing to confirm the aforementioned double support, then the bears may take charge and revisit the low of 59.87.
Levels to keep an eye on:
D1: 64.12 67.03 62.52
H4: 64.05 65.38 67.20 and the low of 59.87
If you have any questions, comments, or opinions regarding the Technical Analysis, feel free to post them using the commentary form below.