Daily Forex Update: AUD/JPY

By: Dima Chernovolov

AUD/JPY continues to fall inside the 4-hour Rectangle chart pattern which was previously identified by Autochartist. Autochartist rates the quality of this Rectangle at the 5-bar level – which is the result of the slow Initial Trend (3 bars), above-average Uniformity (6 bars) and higher Clarity (7 bars). AUD/JPY is expected to fall further inside this Rectangle – in line with the earlier downward reversal from the resistance zone shown below.

As can be seen from the daily AUD/JPY chart below, the pair earlier reversed down from the strong resistance area lying between the major resistance level 84.40 (which has been reversing the price from the start of March), upper daily Bollinger Band and the 50% Fibonacci correction of the previous downward impulse from January. The proximity of this resistance area increases the probability AUD/JPY will continue to fall inside this Rectangle.

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