Moving Averages Confirm Negative Trend
Moving averages further confirm the negative trend, with the 20-day Simple Moving Average at 93.546 and the 200-day at 98.266, all sloping down. Resistance levels include 89.578 and 90.944, while support could form near 86.13 if selling continues.
The original analysis outlines a market where the Australian dollar is weakening against the yen, slipping below moving averages that typically reflect trend direction over time. These averages – particularly the 20-day and 200-day – are both angling downward, which reinforces the bearish setting. With the price now near 88.50, momentum has clearly tipped in favour of sellers, at least for the short term.
MACD, a tool often used to identify the strength and direction of a trend, now shows a fresh selling signal, noting that recent momentum favours downside movement. Meanwhile, the RSI has slipped below 30, landing around 25. While this would usually indicate an oversold asset – potentially ripe for a short-term rebound – it doesn’t necessarily suggest a turning point yet. RSI, in such cases, tends to remain in oversold territory longer during pronounced downtrends. Alongside this, the CCI has plunged to –309, a reading far below the conventional oversold level of –100. That kind of intensity is often rare, and historically it’s aligned more with short bursts of counter-trend movement than full reversals.
From our perspective, if price action remains beneath 89.57 – the closest resistance level – then sellers will likely maintain control. Secondary resistance lies closer to 90.94, a zone that could act as a barrier should a bounce occur. Essentially, these are the thresholds above current prices that could cap any upward attempts. Should the sellers push on, fresh support is potentially lining up around 86.13, based on previous demand in that region. If this level is seen in the next few sessions, we’ll be watching closely how price behaves – whether it consolidates, bounces, or slides even further.
Trading Positions and Long Term Downtrend
Trading positions should respond less to oversold signals when in motion with a wider, longer-term downtrend. Put another way, while some indicators begin to suggest conditions are ripe for a retracement, that doesn’t mean a trend reversal is in motion. Rather, it implies any rebound, if it shows up, might struggle to gain ground beyond the levels outlined above.
In the weeks ahead, we might expect continued selling into strength, especially toward 89.57. Entries around here carry more risk of rejection, particularly with the moving averages trending lower and price struggling to gain footing. We remain attentive to whether price reaches support near 86.13 swiftly or finds room to pause and consolidate. For now, momentum tools and trend signals remain aligned to the downside.
