It will be crucial for the 4H and/or Daily closing prices to stay below the recent high at 75.76. Note, that there might be spike produced above this level, but only break above the spike will invalidate expected downside correction.
Disclaimer: The analysis presented in this article is for educational purposes only and should not be considered as financial advice.
This analysis was done on MetaTrader 4.
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Trade Idea Details:
Key support levels: 75.00, 74.00
Key resistance levels: 75.76
Price Action: today AUD/JPY formed a double top at 77.76 along with bearish divergence on the RSI oscillator. This could trigger a correction to the downside at least in the short term. Therefore, as long as the Daily closing price remains below the recent high, the correction should be expected. There are two downside targets based on 2 Fibonacci retracement levels.
The first target/support is seen at 74.05 and it is confirmed by 23.6% and 38.2% retracement levels. The second target is seen at 72.22, confirmed by 76.4% and 50% retracement levels. All in all, it would be important to watch either a rejection of a breakout below the first support at 74.05. Especially below the 74.00 psychological level, because this should trigger a further decline towards the second target.
Potential Trade Idea: Selling opportunity will be open while the price is at 75.50 or above because the best risk/reward ratio can be achieved. Alternatively, for safer trading, wait for the hourly break and close below the psychological support at 75.00. Potential StopLoos could be placed at 77.05, while Take Profit could be placed near 72.25