© Dukascopy Bank SA
Being that an up-move observed in the first half of February has already twice failed at the level of 93, we may assume that AUD/JPY has formed a double top pattern that in turn increases the chance of a sharp decline in the nearest future. This pattern also implies a neck-line at 91.12, which needs to be breached for the bearish potential to be fully realised.
Ultimately, the sell-off may extend down to 88.24, Feb 3 low, considering that there are no important supports below the neck-line, only a few four-hour pivots. However, we must notice that the traders' sentiment is explicitly bullish—73% of open positions are presently long.
© Dukascopy Bank SA