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The AUDJPY looks set to break lower this week.
Since I first discussed the pair on the 23rd, the pair has been locked in a stalemate just above key support.
But that was a sign of weakness, in my opinion.
I’ve written about this type of “heavy” price action in the past.
Anytime a market begins to weigh on a support level like this, it’s usually an indication of an imminent breakdown.
As always, though, it’s going to take a daily close below support to confirm the short idea.
That could occur within the next few hours, judging by today’s action.
Just remember that I use New York close Forex charts, so the “daily close” refers to the 5 pm EST closing time.
A close below that support level around 74.20 would expose 73.40 followed by 71.80.
It could even trigger a move to the pattern’s inception point at the year-to-date low of 70.00.
This idea is also in agreement with the long-term trend for the AUDJPY, which has been pointed lower since September 2017.
In fact, the downtrend here dates back to April 2013.
We’ll see if AUDJPY sellers can get the job done this week. If they can, this pair has quite a lot of potential, in my opinion.