Like all Yen pairs, AUDJPY experienced a major weekend gap to start the trading week. The 120 pip gap came just after the pair had broken down from a wedge pattern that formed during the month of June.
However unlike most of the other Yen pairs, AUDJPY was able to fill the gap during yesterday’s session. That bullish momentum was short-lived as sellers rushed in to sell anything above former support at 94.55.
Now that the dust has settled we can see that the selling pressure carved out a bearish pin bar at support-turned-resistance. This pattern comes on the heels of the break of wedge support on June 26th, which hints at the idea that the bearish trend is set to continue.
Note that Australia’s trade balance is due shortly at 9:30pm EST, so expect increased volatility at that time. In addition, Friday is a US bank holiday so the next 24 hours should be telling for AUDJPY.
Summary: Opportunity to trade yesterday’s bearish pin bar at resistance. Key support comes in at 93.75, 93.00 and 91.75. On the flip side, a move above 95.00 would negate the setup.
