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Fan Yang

AUD/JPY Threatening to Break Support with Heavy Price Action

Last week, we looked at AUD/JPY as it tested a key support around 82.00. Well, price action continues to hammer at this support, and it looks like we should anticipate a break.

AUD/JPY Daily Chart

(click to enlarge)

Bearish Engulfing Candle:
- The 4/18 session was a bearish engulfing candle (higher open and lower close than previous). Or at least, it was an outside bar (higher high and lower low than previous).
- These types of candles reflect a dominating bearish move after some indecisive sessions.
- Therefore, I would anticipate a break.
Next Support:
- After the break, I would look at the 80-81 area for some significant buying. 
- I think we should also look for a bullish divergence between price and the RSI to anticipate support and a subsequent bullish swing. 

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