Based on a monthly chart going back to 2010, AUDJPY has clear distinct levels and is breaking down systematically. Here it has clear proposition to test 52-week low at 80.50. After 80, 74 becomes an attractive proposition.
Based on these patterns, we are in consolidation phase before main trend asserts itself. However I look at these 3 charts of AUDUSD, AUDJPY and SG30, bullish is not the word to describe.
AUDJPY is a potential downside continuation pattern currently doing consolidation. At the moment, it is at support from last year’s bottom. A new 52-week low printed first quarter this year suggests further lows. Negative implications to stock indices if previous correlation is still valid.
Add this 3M chart of the same AUDJPY-SIMSCI divergence theme. What’s notable is that AUDJPY appears to be stepping down to a lower range where it traded between 2010 – late 2012 while SG30 remains at lofty levels.
This post follows up two previous observations. A high probability reversal setup spotted in AUDJPY on 25 January 2018 and a similar setup spotted in NZDUSD last week 15 March 2018. AUDJPY is confirmed and moving along nicely while NZDUSD is perched at the edge of confirmation.