AUD/JPY Just Might Have Been Taken by Bears

The Australian dollar versus the Japanese yen currency pair is depreciating, thus attracting more buyers. However, they could be at a disadvantage.

Long-term perspective
After printing the low at 69.95 and confirming 71.09 as support, the price entered an appreciation that almost reached the 76.02 resistance, peaking at 75.67.
From 75.67 a depreciation began, bringing the price — as of 09:00 GMT — at the 73.93 level. This level is a well respected one, serving as both support and resistance.
As a consequence, it is natural to assume that the bulls are foreseeing the 73.93 level to be confirmed as support. These expectations receive even more credit in the light of the ascending movement that began at 69.95.
However, it can be easily seen that the market, overall, is descending — see the far left side where the price confirmed 80.54 as resistance. At the end of this descent, the appreciation — from 69.95 — commenced and begins to take the shape of a continuation pattern. In other words, the market made a deep decline that is followed by a pretty symmetrical ascending structure. This setup is perfect for continuation, thus the expectation would be for the depreciation to continue.
Even if the market tries to rotate from 73.93, the bulls must be very cautious, as even a strong bullish pattern can be quickly invalidated in the considered context.
If 73.93 fails or is confirmed as resistance, then 71.09 is the prime target, with a possible pause at the psychological 72.00 level — not highlighted on the chart.
If, in the end, the bulls win, then the 75.00 psychological level — also not highlighted on the chart — is a good booking area.

Short-term perspective
The market was in an appreciation phase, but after 74.96 gave way and later on was confirmed as resistance, it dropped, reaching the support of 73.90.
The bulls look like they are not able to withstand the bearish pressure. So, if the piercing of 73.90 is not rendered as a false one, then further decline is possible, the first target being 73.10.
At 73.10 the market could print consolidate briefly and aim for the next area of interest, 72.47.

Levels to keep an eye on:

D1: 73.93 71.09 72.00 75.00
H4: 73.90 73.10 72.47


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Original from: www.earnforex.com