AUDJPY False Break of 85.35 Triggers Selling Opportunity
We looked at the AUDJPY on Thursday of last week. At the time the pair was trading just below the 85.35 handle, a level that’s served as a pivot since the new year began.
The idea was to watch for a sell signal from new resistance. However, Thursday closed at 85.51, which canceled out any notion of shorting the cross. I wasn’t interested in buying the pair on the break given the velocity of the 300 pip decline the week before.
By the close of Friday’s session, the AUDJPY had fallen back below 85.35. The drop was so severe that sellers nearly carved out a bearish engulfing candle. But Thursday’s apparent false break of 85.35 serves as a bearish signal just the same.
From here any retest of the 85.35 area is likely to encounter an influx of selling pressure. The next key support comes in at recent lows at 83.80. A daily close below that would expose the 82.50 handle.
Keep in mind that the AUDJPY will also be at the mercy of Tuesday’s RBA decision.
The idea was to watch for a sell signal from new resistance. However, Thursday closed at 85.51, which canceled out any notion of shorting the cross. I wasn’t interested in buying the pair on the break given the velocity of the 300 pip decline the week before.
By the close of Friday’s session, the AUDJPY had fallen back below 85.35. The drop was so severe that sellers nearly carved out a bearish engulfing candle. But Thursday’s apparent false break of 85.35 serves as a bearish signal just the same.
From here any retest of the 85.35 area is likely to encounter an influx of selling pressure. The next key support comes in at recent lows at 83.80. A daily close below that would expose the 82.50 handle.
Keep in mind that the AUDJPY will also be at the mercy of Tuesday’s RBA decision.
