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AUD/JPY Technical Analysis: Eyes 75.00 on bearish divergence of key indicator

2019-11-08 09:20    FXYEAH
  • AUD/JPY is looking south with the hourly chart reporting a bearish divergence of MACD. 
  • The daily indicator is also flashing signs of bullish exhaustion. 
  • AUD likely to remain on the defensive due to the dovish RBA's SoMP. 

AUD/JPY risks falling to 75.00 with the hourly chart moving average convergence divergence (MACD) histogram reporting a bearish divergence. 

A bearish divergence occurs when the indicator charts lower highs, contradicting higher highs on price and is considered an early warning of an impending drop. 

The daily MACD is printing shallow bars above zero, a sign of weakening of bullish momentum. 

The case for pullback looks stronger if we take into account the dovish RBA SoMP released a few minutes before press time. The statement carried a downward revision of the December growth forecast and said the wage growth is likely to remain low and unlikely to pick up anytime soon. 

The pair is currently trading at 75.30, having hit a high of 75.56 leading up to the release of RBA's SoMP. 

A drop to 75.00 may remain elusive if China's trade data blows past expectations, strengthening the already bid equities and weakening demand for the anti-risk JPY. 

Hourly chart

Trend: Pullback

Technical levels


JPYAUDTechnical Analysis

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