AUDJPY has completed its higher degree of corrective structure under weekly time frame - landing itself into oversold conditions. RSI on daily chart was trading near 30 while MACD still floating along with bears, even the EMA200 wasnt able to stop the market from breaching any further, this was because the pair was following weekly trend which had already provided us with bearish indications last week after breaking out from our major support at 81.30. AUD/JPY defends corrective pullback from multi-day low, edges higher of late. Risk-off mood cools amid stimulus hopes, further support for easy money policies.

Over half of Australia is under virus-led lockdown, Tokyo again registers over 1,000 cases.

BOJ Minutes, Aussie Retail Sales could offer immediate direction, risk catalysts are the key. The daily chart has formed a 5 wave bearish wave structure which has also came to an end and its time for a corrective wave formation to take place. We are observing weekly and daily chart which are both indicating an end to the bearish sentiments in accordance to the major technicals. AUDJPY has entered a strong demand zone again where the market is most probably going to take an off shoot towards EMA50 on daily chart i.e 83.20. 

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

The market structure ended at our 50% fibb retracement level and has its first daily resistance at 61.8% fibb where the market is bound to retrace under any conditions.  Although oversold RSI and multiple halts to the bearish trajectory between 80.00 and 79.70 test AUD/USD bears, the recovery moves remain unconvincing below the 200-DMA level of 81.20. According to fundamentals , Minutes of the latest Bank of Japan (BOJ) monetary policy meeting and Japanese trade data for June will precede the Aussie Westpac Leading Index and the preliminary reading of Retail Sales for the previous month to direct immediate AUD/JPY moves. Given the comparatively downbeat expectations from Aussie catalysts, coupled with the magnified COVID-19 woes in Canberra, AUD/JPY may find it tough to extend the latest recovery. 

AUDJPY D1

Jul 21 2021

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