Just two sessions ago the AUDUSD carved out a bearish pin bar from support turned resistance. The trade has played out in textbook fashion so far, and now it seems the AUDJPY is following in its footsteps with some bearish price action of its own.
The rising wedge that extends from the December 2016 low broke down yesterday. These patterns often signal exhaustion and at least a correction of the current trend.
I first mentioned this formation on February 27th. At the time the pair was testing support for the second time. But without a daily close below the level, I decided to stay on the sideline.
However, yesterday’s close at 86.08 leaves me watching for a selling opportunity on a retest of the area as new resistance. As mentioned last month, key support from here comes in at 85.35 followed by 83.73.
The upcoming CPI and PPI figures out of China at 8:30 pm EST could cause a stir. So you may want to keep these two events in mind if looking for an entry during the Tokyo session.
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