The 30-minute chart of the AUD/JPY has bounced higher within a very strong downtrend. The nine-bar Autochartist Initial Trend reading indicates that bearish sentiment still dominates current price action. The Channel Down breakout through the pattern's top line is therefore triggering an aggressive reversal entry long. The buy taken at the downtrend line break at 78.08 (E) should not be expected to travel much higher than recent resistance (at least not immediately), which means that prices will be met with selling pressure between the bottom of the Forecast range at 78.41 (F) and the near-term high at 78.44.

Forex Update

Reversals of strong trends are often viewed as short-term, contrarian entries-and are more likely to be seen simply as a correction (as opposed to a reversal) by the broader market, which will consider a reversal as another opportunity to sell into the downtrend. Add to the strong downtrend a low, four-bar Autochartist Breakout reading-which reflects low bullish momentum accompanying the pattern reversal-and there are plenty of reasons to see that the bears still dominate the intraday psychology of the AUD/JPY.