2/1/17 Trade AUD/JPY

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Looking at the weekly time frame on AUD/JPY the pair has been on a downtrend since Nov 2014 which was confirmed by the 200 moving average being crossed by the 50 then the 100 MA providing a bearish formation. This trend the turned bullish in Oct 2016 and recently rejected the fib retracement level of  0.5 with a shooting star candle confirming a reversal. Also the RSI has reached the overbought level which is more confirmation of a reversal.

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AUD/JPY weekly showing bearish confirmation

On the daily chart you can see where the price hit the 0.5fib level and instantly rejected it with two bearish candles with the second even causing a gap showing a strong reversal. Price has recently been in consolidation which gives a good opportunity to sell. The RSI has just crossed the 50 mark giving room for more potential bearish movement.

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AUD/JPY daily timeframe showing strong rejection


On the hourly chart the pair has got into slight consolidation after rejecting the RSI overbought level. Also the moving averages have aligned into bearish formation.

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AUD/JPY Hourly chart showing a bearish trend


I think this pair could fall to previous weekly resistance of 81.750 which if 0.5 fib retracement from the recent uptrend, with stop loss set at 85.000 which seems to be the resistance level from recent consolidation.

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