FxWirePro: AUD/JPY rising wedge formation creates new bearish set up, oscillators confirm bearish trend

We spotted out a formation of rising wedge pattern on daily chart.

This is now making downswing moves which is on the verge of breaking base trend line.

EOD graph suggests bearish signals as we spot out back to back shooting star pattern candles at peaks of 90.058 and 89.991 levels.

The pair is currently trending around 89.129 levels which has slipped below 10DMA which would mean that current dipping prices have huge potential on downside direction in medium term.

More importantly, leading oscillators like RSI and slow stochastic curves began showing divergence with the previous upswings.

We believe this as bears are getting active again. RSI is currently trending at around 56.4442 that has started showing downward convergence to the current price dips from above 70 levels which is overbought zone.

In addition to that %D crossover above 80 which is signifying again overbought pressures on stochastic curve and it gives us one more reliable indication that the pair is unlikely to break above mentioned resistance.

This APAC pair kept losing strong supports at 89.90 and 89.25 regions, as a result, you can figure out that the current prices have slid below 10DMA curve which served as the strong demand zones for this pair couple of times in the past as well.

Thus, we reckon any breach below base trend line of the falling wedge would determine the direction of next downtrend but certainly bias towards southwards for short term targets at 88.30 levels. Upon breach of baseline would set up next medium term targets T1 at 86.151, T2 at 85.787 and T3 at 83.375.