AUDJPY is a pair I’ve been watching for the last week, due to the fact price broke out of a supportive containment line during the previous week’s trading. The market had been consolidation above the support area of 95.35, condensing into a very tight mess of consolidation mess.
A clear, decisive breakout occurred last week where the market finally broke through that support line and closed lower. The plan was to wait for a retest of the old support level and see if the price action lets me know it will hold as new resistance. The market did come back up and test the level as expected and printed an Indecision Candle on the daily chart.
The Indecision Candle is a great catalyst for breakouts at these ‘breakout & re-test’ type areas. The market has now broken the lows of the Indecision, verifying the breakout and triggering short positions. If the market continues to trend downwards on the daily time frame, we could be looking at a retest of the 93.68 swing low support level.