AUD/JPY Poised for Downtrend Amid Fibonacci and RSI Signals

The AUD/JPY pair is exhibiting a bearish demeanor in the upcoming market cycle. A close examination of the chart reveals that the previous bullish trend was notably robust, ascending sharply to the 100.62 level. However, the ensuing bearish trend has unfolded in a less direct manner, adopting a zigzag pattern that incrementally steps downward. This pattern increases the likelihood of retracements, which we have already observed.

The initial retracement occurred within the Fibonacci levels of 0.382 to 0.5, with price oscillations between 99.182 and 99.369 respectively. This price behavior provides a strong indication of a continuing bearish trend. Subsequently, the second retracement transpired within the range of 98.82 to 98.70.

Currently, the price is situated at the third Fibonacci retracement level between 98.65 and 98.56, and we anticipate a pullback from this zone. A further descent is expected, particularly if the price breaks through the 98.19 support level.

RSI Insight:
During the aforementioned retracement phases, the Relative Strength Index (RSI) also plays a pivotal role in determining the strength of the retracements. For the third retracement to be deemed significant, the RSI should cross above the 60 mark, reinforcing the validity of the pullback.

Stop Condition:
The outlined bearish perspective could be negated if the price breaks and sustains above the 98.92 level. Such an upward movement would call for a reassessment of the bearish outlook and potential revision of trading strategies.

Endnote:
The current technical setup of AUD/JPY suggests a bearish continuation is more likely, with Fibonacci retracement levels and RSI confluence supporting this view. Traders should monitor these levels closely, with a keen eye on the RSI for additional confirmation. As always, it's prudent to implement sound risk management practices to mitigate against unforeseen market movements.