FxWirePro: AUD/JPY weaker on breach of crucial supports 86.604 – rebound seems unlikely

The pair has been fragile to hold onto the crucial resistance at around 87.069 and now again failed to hold the supports at 86.604 levels which we already stated earlier that it was unable to breach above these levels, as a result more weakness is anticipated in this pair at current level.

We were bearish on this APAC pair and shared our stance accordingly in our last week's post, you can now figure out from the daily chart that the yellow circled areas served as the strong demand and supply levels for this pair couple of times in the past as well.

We could foresee the next crucial support is only at around 84.576 regions on daily chart, if it does not manage to find this level it may even drag up to 83.750 levels.

EOD graphs reveal bearish sentiments, you can figure out the pair has currently fallen below 10DMA and headed towards south.

More importantly, leading oscillators like RSI and slow stochastic curves began showing convergence with the previous downswings; we believe this as bears are getting active.

RSI is currently trending at around 46.9033 that has been showing downward convergence to the price dips near 70 levels which is overbought zone.

In addition to that on stochastic curve it has reached oversold zone but it is struggling for %K crossover which means bulls have been sluggish even at this stage.

While bears to extract maximum leverage to their returns as we can see %D crossover has been maintaining above 80 which is signifying again more retracement is likely and it gives us one more reliable indication that the pair is likely to find above mentioned support level.

Thus, as it failed to hold the above stated resistance level, it would determine the next downward direction of trend.