Hi Traders! AUDJPY forecast and technical analysis is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidences on different timeframes for the same direction then it makes the setup much more reliable. If you would like to learn more about the way we trade and the technical analysis we use then check out the Traders Academy Club Spoiler alert – free memberships are available!
AUDJPY D1(Daily) Chart Analysis – Bearish Divergence, Parabolic Sar, ADX Indicator
On the daily chart, we have a bearish divergence that has formed between the first high that has formed on 25th February 2021 and the second high that has formed on 18th March 2021 based on the MACD indicator which we may consider as evidence of bearish pressure. Also, the ADX indicator gave a bearish signal at the cross of -DI (red line) versus +DI (green line), and the main signal line (silver line) reads value over 25, we may consider this as evidence of bearish pressure. In addition to this based on the Parabolic Sar the dots are above the price which we may consider as another evidence of bearish pressure. We may now move down to one timeframe lower and see if we can find evidences supporting this bearish view.
AUDJPY H4(4 Hours) Chart Analysis – Bearish Divergence, Bearish Convergence, Strong Resistance Zone
On the H4 chart, the price has created a bearish divergence between the first high that has formed at 84.940 and the second high that has formed at 85.440 based on the MACD indicator. We also had another bearish divergence between the first high that has formed at 84.767 and the second high that has formed at 85.440 and then the price moved lower and broke below the low at 84.107 creating lower lows, thus forming a classical setup of bearish divergence followed by bearish convergence. Hence as per the book scenario, after a bearish convergence, we may look for possible corrections and then further continuation to the downside. Currently, it looks like the correction that we are looking for is happening. Also, we have a strong support zone that has formed and the price which is moving lower has broken below this zone and is holding below it, we may consider this as another evidence of bearish pressure. Currently, this strong support zone is acting as a strong resistance zone for us. Until the invalidation level (marked in green dotted line) holds my view remains bearish here and I expect the price to continue lower further after correction.
Technical Analysis & Forecast Summary
AUDJPY D1(Daily) Chart Analysis
- Bearish Divergence, Parabolic Sar, ADX Indicator
AUDJPY H4(4 Hours) Chart Analysis
- Bearish Divergence, Bearish Convergence, Strong Resistance Zone
Trading Tips
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Yordan Kuzmanov
Chief Trader at the Traders Academy Club
