AUD/JPY Could Head for 71.09

The Australian dollar versus the Japanese yen currency pair sits just under an important support area. Will this phase be rendered as a false break or is the price preparing to confirm the level as resistance?

Long-term perspective
The ascending trend that started after the 71.09 level was confirmed as support managed to reach the 76.02 area.
After printing the high of 76.54 by trying to stabilize the price above 76.02, the bulls had to take a step backward and allow the price to fall under it. The bears used this opportunity at their best, extending the depreciation until 73.93.
From 73.93, the bulls responded and drove the price back to the 76.02 area. But the bears, yet again, managed to keep up. Even more, this time the price confirmed the level as resistance, which of course translates into crystalizing a lower high with respect to 76.54.
And another fall came, but on this occasion the price went beyond the previous low, extending until 73.29. Basically, this means that the market etched a new lower low, thus giving credit to the bearish profile.
From this point onwards, the expectations are for the price to continue depreciating. This can happen after the rate further consolidates under the 73.93 level or after another failed bullish attempt would have been consumed — an appreciation above the level, followed by a quick retracement under it.
From this point of view, the next target is 71.09. Noteworthy is that the 72.00 psychological level — not highlighted on the chart — is a good intermediary area for parking part of the profits.

Short-term perspective
The appreciation that started after 73.90 was confirmed as support ended as 75.99 failed to be confirmed as support.
The downwards movement that was put in motion passed beyond the low crafted by the confirmation of 73.90 as support, touched 73.39, and seems to search for resistance.
A possible such resistance is represented by 73.90. If the price unfolds a range limited by 73.90 and 73.39, respectively, then the piercing of 73.39 is to be expected, targeting 72.47.
On the other hand, if the bulls manage to bring the price back above 73.90, any appreciation may be limited by 74.56.

Levels to keep an eye on:

D1: 73.93 71.09
H4: 73.90 73.39 72.47 74.56


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Original from: www.earnforex.com