- AUD/JPY bulls stepping in at a strong demand zone.
- The RSI on the 4-hour time frame is now oversold, pointing to a near-term bullish correction.
- The weekly chart, however, is in the throes of a downside continuation to a 38.2% Fib.
AUD/JPY is on the verge of a meaningful upside correction on oversold conditions on the 4-hour chart, with a confluence of bullish probabilities from the longer-term market structure and chart patterns.
The following is a top-down analysis of the cross to illustrate where the next opportunities are within the price action, both bullish and bearish.
The monthly head and shoulders are bullish but the market could be due for a downside correction.
The W-formation on the weekly chart is making the case for a 38.2% Fibonacci retracement of the weekly bull trend.
The daily chart has reached a demand zone following a series of bearish and topping candlestick patterns.
With RSI oversold, there is an argument for the upside, at least for a correction from this demand zone at this juncture before a weekly continuation.
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