- Demand for the Japanese yen rises on risk off sentiment weighing heavily on AUD/JPY.
- The pair is seeing a sharp drop on the day, down 0.45% as we write, trading at 83.36.
- Price action has slipped below 20-DMA support at 83.44 and we see scope for further downside.
- On the hourly charts, the pair has broken strong trendline support at 83.65 levels and now finds next major support at 1H 200-SMA at 83.18.
- Technical studies are bearish and a decisive break below 83.18 (1H 200-SMA) will accentuate weakness.
- Scope then for test of 82.65 (61.8% Fib retrace of 81.488 to 84.527 rally) ahead of 81.78 (June 6 low).
- On the flipside, we see resumption of upside only on decisive break above 21-EMA.
Support levels - 83.18 (1H 200-SMA), 83, 82.65 (61.8% Fib retrace of 81.488 to 84.527 rally)
Resistance levels - 83.68 (5-DMA), 83.80 (21-EMA), 84
Recommendation: Good to go short on break below 83.18, SL: 83.80, TP: 82.65/ 82/ 81.80
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