AUD/JPY Technical Analysis: Charting an inverse head-and-shoulders bull reversal

• The AUD/JPY pair has breached the falling trendline, having carved out a bullish divergence of the relative strength index (RSI) over the last couple of days, the hourly chart indicates
• The 4-hour also shows a bullish RSI divergence.
• The AUD/JPY will likely rise to 80.18 in a few minutes, signaling a completion of the inverse head-and-shoulders bullish reversal pattern. A break above that level would open up upside toward 80.60.
• A better-than-expected National Australia Bank’s business confidence and business conditions index released a few minutes ago is also positive for the AUD/JPY.
• On the downside, a move below 79.76 would invalidate the bullish setup.

Hourly Chart

Spot Rate: 80.01

Daily High: 80.16

Daily Low: 79.87

Trend: Bullish

Resistance

R1: 80.16 (session high)

R2: 80.45 (5-day exponential moving average)

R3: 80.82 (10-day exponential moving average)

Support

S1: 79.76 (previous day’s low)

S2: 79.59 (76.4% Fib R of 78.68/82.51)

S3: 79.52 (Sept. 3 low)