AUD/JPY Hits Yearly Resistance As Bearish Divergence Signals Potential Reversal

AUDJPY Price Analysis- September 17

AUD/JPY is showing signs of a potential major reversal as a powerful rally collides with a significant yearly resistance level. Clear signs of buying exhaustion are emerging, headlined by a bearish divergence on the daily chart. With the short-term trend already flipping in favor of sellers, the market appears to be at a critical tipping point where a significant pullback could be imminent.

AUD/JPY Key Levels

Support Levels: 97.28, 94.36
Resistance Levels: 98.26, 100.22

The daily chart shows that AUD/JPY has been in a strong uptrend since late August, a rally that has driven the price directly into the major resistance zone at 98.26, which marks the high for the year. Upon reaching this formidable barrier, the bullish momentum has begun to wane, evidenced by recent small-bodied “spinning top” candles that signal market indecision.

Currently trading at 97.61, the pair is flashing a significant warning sign. A bearish divergence is forming on the Money Flow Index (MFI). While the price has returned to its July highs, the MFI at 66.27 is notably lower than its previous peak. This suggests that the buying pressure (money flow) behind this recent rally is weaker than the last, a classic leading indicator that the uptrend may be losing its underlying strength. The price has been riding the upper Bollinger Band, a sign of strength, but this can also signal exhaustion when it occurs at a major resistance level.

AUD/JPY Short-Term Trend: Bearish Reversal (4-Hour Chart)

The 4-hour chart confirms that a short-term reversal is already in progress. After failing to push past the yearly highs, the price has rolled over, breaking its bullish market structure. The most significant development is the decisive break below the middle Bollinger Band (the 20-period moving average).

This is a clear technical signal that the short-term trend has shifted from bullish to bearish, with the middle band now likely to act as dynamic resistance. This bearish price action is strongly validated by the Money Flow Index (MFI). It has crossed decisively below the 50 midline and currently sits at 38.54.

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