- AUD/JPY bears moving into the length built up from 90.00.
- The daily W-formation is in play and bears eye a break of trendline support for the day ahead.
AUD/JPY has rallied in the week but is now coming under pressure with longs being out under heat and the weak hands moving out. We have three days of build-up since Friday's failed break of below 90.00 which leaves the scope for a meaningful correction for the day (s) ahead.
AUD/JPY daily chart
The daily chart is showing signs of exhaustion on the bid and the W-formation is a firm reversion pattern that could well see the price move in for the retest of the neckline near 91.70:
The price is indeed resting above the trendline support, however, so the overall outlook remains bullish so long as the bulls commit to the neckline of the W-formation and build their foundations for the next move higher from there. A break of this area, however, will put the bulls in jeopardy of a major sell-off:
AUD/JPY H1 chart
The support is still intact, however, and we could see a move up into retrying the high prior to resistance kicking in which leaves the London and US sessions open in this regard.
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