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Home / Blogs / FxWirePro: bearish RSI divergence and bearish candle patterns signal AUD/JPY likely to resume short term bears, major trend in consolidation phase seems intact

FxWirePro: bearish RSI divergence and bearish candle patterns signal AUD/JPY likely to resume short term bears, major trend in consolidation phase seems intact

 

Last 2 days of trading sessions this pair pops up with bearish candle pattern (Doji or Evening window star), bearish RSI divergence signal weakness (daily charts).

After big bearish candlestick patterns, bears have plummeted prices below 7DMA but managed to bounce back above. But, no momentum has been observed for the day.

In the major trend, ever since it has tested support at 81.419 levels, the uptrend in consolidation phase retraced more than 50% Fibonacci levels.

For now, the uptrend likely to extend further on healthy momentum and bullish EMA crossover (refer monthly chart).

But the shooting star candle patterns have occurred at 86.327 levels (on monthly plotting) that signal little weakness in this pair.

On a broader perspective, consolidation phase (from last 1 year or so) now seems to be gaining traction at 50% of Fibonacci retracements from the lows of 72.437 levels (Jun’16 lows).

Historically, the leading oscillator (RSI) on the monthly term was sensing some sort of resistance at 65 levels, while stochastic signals the intensified buying sentiments with its %k crossover.

To substantiate this strength, MACD shows prolonged price upswings further but has remained below zero level which is bearish trajectory (on monthly charts).

Trade Tips:

Well, as a result of above technical reasoning, on speculative grounds we advise tunnel spreads which are binary versions of the debit put spreads.

This strategy is likely to fetch leveraged yields than spot FX and certain yields keeping upper strikes at 88.979 and lower strikes at 87.811 levels.

Currency Strength Index: FxWirePro’s hourly AUD spot index is showing 0 levels (which is absolutely neutral), while hourly JPY spot index was at shy above -38 (mildly bearish) at the time of articulating (at 06:32 GMT.

 

Our chart for the call

 

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2 comments

  1. Hey there just wanted to give you a quick heads up and let
    you know a few of the images aren’t loading properly. I’m
    not sure why but I think its a linking issue. I’ve tried it in two different internet
    browsers and both show the same outcome.

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