- 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.
Monthly chart
-637465948894437026.png)
The monthly head and shoulders are bullish but the market could be due for a downside correction.
Weekly chart
-637465954533597335.png)
The W-formation on the weekly chart is making the case for a 38.2% Fibonacci retracement of the weekly bull trend.
Daily chart
-637465955014107288.png)
The daily chart has reached a demand zone following a series of bearish and topping candlestick patterns.
4-hour chart
-637465959156914879.png)
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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