Hi Traders! AUDJPY bearish convergence provides sell opportunity for us. A detailed analysis of this setup is as follows:
AUDJPY Daily Chart:
On the daily chart the price is moving inside a range, this range is formed by the highs and lows respecting the same support and resistance zones. Currently the price is bouncing from the top of this range. We may now expect it to move lower until it reaches the bottom of the range or at least to the 38% Fibonacci retracement as marked on the screenshot.
AUDJPY H4 Chart:
On the H4 chart we have bearish divergence that has formed on the MA’s. Currently the price is breaking below the low (87.62) shown in the screenshot creating a classical setup of bearish divergence followed by bearish convergence. Hence we may now expect a correction to happen in the form of double waves down or we may get a flat correction. Once the correction completes itself we can join the bears.
We also have a special cycle that has completed itself and we may expect the price to reach the 38.2 fibo retrace. In other words as long as the high at 89.062 is holding we can look for a correction to happen and the price to move lower. Once the correction completes itself we can look to short this pair.
AUDJPY H1 Chart:
On the H1 chart we have a triple cycle that has formed and we might expect this triple cycle to complete itself as the price has reached a good support zone (shown in the screenshot). We also have a bullish divergence that has formed which we may consider as a confirmation for the bullish momentum. This bullish momentum can be considered as the correction and once this correction completes itself, we can look for sells.
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