The AUD/JPY reached a new YTD high on Monday but retreated some, as profit-taking sent the pair tumbling and formed an “inverted hammer,” a candlestick with bearish implications, which has a long wick on the top of the real body, meaning that lower prices loom. At the time of writing, the AUD/JPY is trading at 93.00.

Overnight, the AUD/JPY edged higher since Monday’s Asian session. However, it peaked near the mid-European session at 94.31, plummeting afterward towards 92.19, just above the 50-hourly simple moving average(SMA), but later stabilized around 92.82. 

The AUD/JPY stills in an uptrend, but the inverted hammer leaves the pair vulnerable to selling pressure. Furthermore, the AUD/JPY briefly pierced the 78.6% Fibonacci retracement at 93.39, retreating towards Monday’s daily low at 92.19, and then reclaimed the mid-line between Pitchfork’s top-central parallel lines around 92.90.

Downwards, the AUD/JPY first support would be 92.00. Once cleared, the next demand zone would be the 91.00 mark, followed by Pitchfork’s central parallel line around 90.00.

Upwards, the AUD/JPY’s first resistance would be the psychological 93.00 mark. Breach of the latter would expose the 78.6% Fibonacci level again at 93.39, followed by the 94.00 mark and the YTD high at 94.31.

Given the bullish MACD signals supporting the AUD/JPY run-up beyond November 2015 top, the upside momentum eyes the August 2015 high surrounding 92.70.

However, an upward sloping resistance line from December 2019, around the 93.00 threshold, will challenge the AUD/JPY bulls afterward.

Meanwhile, pullback moves remain elusive beyond the late 2015 peak of 90.72, a break of which will direct AUD/JPY sellers towards the year 2017 high of 90.30 and then to the 90.00 round figure.

However, an upward sloping support line from March 2021, with previous resistance around 87.00, appears a tough nut to crack for the AUD/JPY bears.

Overall, AUD/JPY remains on the front foot despite having limited room on the upside for the short-term.

Inverted Hammer Will Bring Selling Pressure to AUDJPY

Mar 29 2022

Stop Loss -2.20%

Holding time 6d17hr

91.637

Entry price

93.650

Stop loss price