- AUD/JPY bears are looking for a test of old daily resistance.
- Longer-term, the monthly 38.2% Fibo is a focus.
In a risk-on environment, AUD/JPY has benefitted from a bout of US dollar weakness, a lively commodity complex and despite the Aussie Consumer Price Index spoil.
With that being said, the technical conditions are pointing to a sizeable downside correction on a monthly basis while capped on the weekly chart in trapped sideways conditions.
From a daily perspective, there is a focus on the downside according to market structure and the following top-down analysis illustrates the bearish bias.
Bears will be looking for a break of support to target the monthly support structure.
Meanwhile, the weekly resistance is expected to hold and a downside opportunity to the old resistance structure that has a confluence with the 50% mean reversion target is in focus.