AUDJPY broke above the 90.20 area last week, closing a few days above that mark.
However, bulls failed to hold the level as support on Friday.
That gives us a failed level to watch this week.
A failure to one side of a pattern or range usually triggers an extended move in the opposite direction.
So any bearish price action from 90.20 this week could offer a selling opportunity.
However, you have to be careful while AUDJPY is above the March 24th trend line.
That’s especially true when you consider that last week’s breakdown occurred on a Friday, which tend to be low-volume breaks and, therefore, prone to fail.
A sustained break below the March 24th trend line opens up the 87.00 range lows.
Alternatively, a sustained break back above 90.20 on the higher time frames invalidates Friday’s breakdown and exposes the 91.40 lows from February.
Keep in mind that we have Australia CPI coming up in just over 24 hours and a BoJ monetary policy statement on Thursday.
Both events will likely trigger significant volatility for AUDJPY, so position size appropriately.
