Hello traders! Above is the AUD/JPY Weekly chart. It shows a very consistent downtrend over a period of nearly 3 years. Indeed a long term price drop. What is interesting is that the price could be forming a triple bottom near 70.00 psychological support. It is 3rd time that AUD/JPY failed to break and close below that price with confidence. At the same time, the pair has reached the bottom of the descending channel back in August 2019, while hitting 69.95 low. This week’s price yet again reached this low, it spiked below $70.00 but failed to break and close lower. This, in fact, could mean that AUD/JPY has reached the bottom, although this is can be quite an early conclusion.
On the 4H chart, we can see that at the bottom, AUD/JPY was trading under very heavy volume, which is similar to the August 23, 2019 trend reversal. This is the reason why AUD/JPY can reverse to the upside as it did previously under similar trading volume. If price won’t produce any new lower lows, we can expect AUD/JPY to correct up strongly. Key resistance is seen near the 74.00 area, which is confirmed by 88.6% Fibonacci retracement level and also corresponds to the ascending channel breakout point. Not to mention that this level has been playing an important role in the past, and acted as support as well as resistance throughout October 2019 – February 2020. Only break and close below 69.37 will invalidate bullish outlook and can result in the further price decline.
Bias: Bullish while above 69.37
Potential Support Zone: 69.37-70.00
Potential Targets: 74.00
Have a profitable trading!