AUDJPY has made a strong move down for several days. For nearly a month to be precise. Following the downward impulse is a consolidation which has constantly left clues that shows the possibility of a further move down.
Orange line 'A' shows the resistance off which the price has been repeatedly rejected while the orange line 'B' shows the support off which the price has been repeatedly pushed back up.
But analyzing the price action, the purple dashes show swings lower than the previous every time the price has come close to 'A'. Though the pair did break above 'A' making a high, the following swings have not managed to break the high of the consolidation. Instead, the swings have made lower high spending a lot lesser time near the region 'A' with each time it has approached. It is also noticeable that the pair has taken longer each time to return to the resistance before quickly going back to support. The longer a pair spends time away from a certain region, the stronger the regions polarity (resistance or support) is.
Also, each swing towards the resistance has pushed the pair deeper into the trend, making new lows almost every time. Thus the descending price action suggests that the pair may be heading towards 'Support 1' or even 'Support 2' on daily in the coming days.
A short is fairly evidenced by the price action analysis.
Orange line 'A' shows the resistance off which the price has been repeatedly rejected while the orange line 'B' shows the support off which the price has been repeatedly pushed back up.
But analyzing the price action, the purple dashes show swings lower than the previous every time the price has come close to 'A'. Though the pair did break above 'A' making a high, the following swings have not managed to break the high of the consolidation. Instead, the swings have made lower high spending a lot lesser time near the region 'A' with each time it has approached. It is also noticeable that the pair has taken longer each time to return to the resistance before quickly going back to support. The longer a pair spends time away from a certain region, the stronger the regions polarity (resistance or support) is.
Also, each swing towards the resistance has pushed the pair deeper into the trend, making new lows almost every time. Thus the descending price action suggests that the pair may be heading towards 'Support 1' or even 'Support 2' on daily in the coming days.
A short is fairly evidenced by the price action analysis.