FxWirePro: AUD/JPY still seems weaker on breach of crucial supports 84.078 – rebound seems unlikely after poor trade balance

After the breach of support 85.646, we think the pair has gone fragile to evidence more dips upto next strong supports at around 83.400 and 82.914 and on intraday terms now again failed to hold the crucial supports at 83.947 levels and slid below 21DMA, as a result more weakness is anticipated in this pair at current level.

We are bearish on this APAC pair after Aussie produced a lackluster trade balance numbers at negative 3.54M to miss the forecasts at 2.50M and a slump from previous flash at 2.727M. While exports have been highly disappointing steep slumps from previous -1% to -5% and imports were unchanged at -1%.

You can now figure out a hanging man pattern at 86.007 near upper Bollinger band on daily chart that the red circled area served as the strong supply trajectory this time for AUD side, it has acted as a strong support and resistance at the same juncture couple of times in the recent past as well.

Intraday graphs reveal nothing but an indecision, slightly bearish bias though, you can figure out the pair has currently fallen below 21DMA and headed towards south.

More importantly, leading oscillators like RSI and slow stochastic curves began showing convergence with the previous downswings; we believe this as bears are getting active.

RSI is currently trending at around 49.1539 (while articulating) that has been showing downward convergence to the price dips.

In addition to that on stochastic curve it has reached oversold zone and showing %D crossover which means bulls in previous rallies have been exhausted and selling momentum is intensifying in overbought territory.

We could foresee the next crucial support is only at around 83.400 regions on daily chart, if it does not manage to find this level it may even drag up to 82.914 levels.

While bears to extract maximum leverage to their returns as we can see %D crossover has been maintaining above 80 which is signifying again more retracement is likely and it gives us one more reliable indication that the pair is likely to find above mentioned support level.