FxWirePro: AUD/JPY struggles to extend channel break, decisive close above 5-DMA could see minor upside

• AUD/JPY rejected at session lows at 83.60, hovers around 5-DMA at 84.02.
   
• The pair has retraced break below channel base support at 83.60, decisive close below required for further downside.
   
• Technical studies support downside in the pair. RSI nicely converging with price action.
   
• Weekly charts show bearish MACD line crossover on signal line which adds to bearish bias.
   
• Decisive break below channel base finds next bear target at 83.37 (78.6% Fib) ahead of 81.78 (June 6th lows).
   
• Close above 5-DMA could see test of 20-DMA at 85.31. We see bearish invalidation only close above 86.57 (200 DMA).

Support levels - 83.37 (78.6% Fib retrace of 81.486 to 90.305 rally), 82.73 (Apr 27 low), 81.77 (May 18 low)

Resistance levels - 84.03 (5-DMA), 84.85 (61.8% Fib), 85, 85.31 (20-DMA)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-AUD-JPY-tests-channel-base-support-decisive-break-below-to-see-further-weakness-1155124) has hit TP1/2.

Recommendation: Trail stop loss to 84.55. Watch out for break below channel base for further weakness.

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