- AUD/JPY remains pressured after stepping back from a three-week top the previous day.
- Upbeat MACD, a joint of 21-day and 50-day EMAs near eight-week-old support line probe sellers cheering bearish candlestick formation.
Despite bouncing off the recently refreshed three-day low of 75.86 to 75.90, AUD/JPY bears remain hopeful during the initial Asian session on Tuesday. The pair reversed Friday’s run-up to the highest since September 18, even lost more than that, the previous day, which in turn formed a bearish engulfing candlestick on the daily (D1) chart.
Although the candlestick signals further weakness of the pair, a confluence of 21-day and 50-day EMAs around 75.80, followed by a descending trend line from August 31, previous resistance near 75.75, will challenge the sellers.
In a case where the bears dominate past-75.75, a two-week-old upward sloping trend line, close to 75.40, will gain the market’s attention.
Alternatively, a clear break of Friday’s top of 76.52 will be needed to defy the bearish candlestick formation whereas the 76.00 round-figure may offer immediate resistance.
If at all the bulls manage to cross 76.52, the 77.00 threshold and September 10 high near 77.75 may offer intermediate halts before highlighting the August month’s peak surrounding 78.50.
AUD/JPY daily chart
Trend: Pullback expected
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