AUD/JPY 4H Chart: Channel Down

Source: Dukascopy Bank SA
© Dukascopy Bank SA
Hovering around the 20 period SMA and daily PP at 76.48, the AUD/JPY currency pair shows further southward potential, implied by the channel down it has been developing over the last week. The pair has broken the resistance line at 76.59, where August 2 lows lie, and there is reason to believe that the lower Bollinger Band at 76.29 might be the next target, followed by the daily S1 at 76.03. On the other hand, the continuous tests of the upper channel trend-line show a possibility for an upward breakout as well. In case that happens, August 2 lows would be tested again, but from the other side, followed by tests of the Bollinger Band at 76.71, 100 period SMA at 76.84 and daily R1 at 76.93. While aggregate 1h technical indicators send BUY signals, gauges for any period longer than that predict further downward pressure on the currency. This expectation becomes even stronger when we look at the extremely high long-short ratio, which signals the pair to be overbought.
© Dukascopy Bank SA
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