AUD/JPY Price Aanalysis: Bears and bulls battle it out at critical hourly support

AUD/JPY bulls stepping in at a critical layer of hourly support.
Bears expect a break to test 82.50 for the closing sessions of the week.

AUD/JPY bears are looking to fill in the imbalance between the 83 figure to at least 82.50 for the closing sessions ahead. However, there is the risk of an hourly inverse head and shoulders. This is threatening an ongoing test of the upside and a deeper correction of the dominant bear trend. The following illustrates the daily, 4-hour and hourly time frame markets structure and price action analysis.

AUD/JPY daily chart

The price has broken a key level of support as well as the 50-day EMA and there is still a massive imbalance in price between here and all the way into the 82 figure. However, the nearer-term target is located at around 82.50. The price action at this juncture is failing to break clear of the old support around the 83 figure and while below 83.20, the focus remains on the downside.

H4 chart

The price has printed a bearish engulfing candlestick in the European hours and we are seeing some mitigation of the imbalance of that supply in New York. The expectations would be for Asia and Europe to step on the gas again which would ultimately flood the market with supply and equate to a downside extension of the dominant trend. The price would therefore be pressured on the way to the 82.50s for a fresh daily low.

AUD/JPY H1 chart

The hourly chart shows that the price was unable to fully penetrate the W formation's neckline which lead to a bid in New York:

However, the price has remained within the day's range and bears are guarding the highs. With that being said, it is now critical that the bears keep in control at this juncture. The risk is that bulls protect the 83 figure which would result in an inverse bullish head and shoulders, as follows:

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