FX.co ★ AUD/JPY: deeper drop still in cards

AUD/JPY Down Channel!

The AUD/JPY pair is trading at 95.86 at the time of writing. As you can see on the H1 chart, the price could drop deeper as long as it stays below the downtrend line. Technically, the downtrend line represents an upside obstacle. Still, its failure to come back down to test and retest the channel's downside line signaled exhausted sellers.

The former low of 95.19 represents a downside obstacle. Testing and retesting the downtrend line may announce a new drop at least until 95.19.

AUD/JPY Trading Conclusion!

Dropping below 95.19 activates further drop and is seen as a selling opportunity. On the other hand, jumping and stabilizing above the downtrend line invalidates a deeper drop and announces an upwards movement.