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  • AUD/JPY faces rejection near key moving average hurdle. 
  • The pair is forming a head-and-shoulders (H&S) pattern on the hourly chart. 

AUD/JPY is trading near 68.90, representing a 0.30% decline on the day, having faced rejection near the descending or bearish 50-day average hurdle at 69.16.

While the broader trend looks bullish with higher lows and higher highs on the daily chart and above-50 reading on the 14-day relative strength index, a convincing breakout above the 50-day average will likely remain elusive for some time, as the 4-hour chart is reporting a bearish divergence. 

Further, the pair appears to be forming a head-and-shoulders pattern on the hourly chart. A break below 68.58, the neckline support, would open the doors to 67.90 (target as per the measured move method). 

The bearish case put forward by the hourly and 4-hour charts would weaken if the JPY cross prints a daily close above 69.26. 

Hourly chart

Trend: Pullback likely

Technical levels