AUD/JPY 1W Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
The outlook on AUD/JPY is strongly bearish. The main reason is that the pair has recently broken out of the bullish channel. Additionally, the rate has formed a well-defined channel, which implies a more near-term sell-off from 97 yen, namely the upper boundary of the pattern. The decline is to extend down to 74.50, where the Aussie is to meet the lower trend-line, reinforced by the 2012 low. There the pair is likely to start a bullish correction. Bearish bias is confirmed by the SWFX sentiment—right now 73% of open positions are long, meaning there is no more place for new bulls to enter the market. By the end of the year AUD/JPY may well fall down to the 2010 and 2011 lows circa 72 yen.
© Dukascopy Bank SA

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