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By: Matt Simpson, Market Analyst
AUD/JPY is showing early signs of weakness as momentum begins to fade following an extended rally. The pair has maintained a strong uptrend, but recent price action suggests that buying pressure is no longer as consistent as before. This shift is drawing attention from traders monitoring for potential reversals or corrective phases. The current setup highlights a market that may be transitioning from trend continuation to short-term consolidation or pullback.
Matt Simpson, Market Analyst at FOREX.com, specializes in multi-timeframe technical analysis across global FX markets. His expertise in identifying divergence and momentum shifts provides valuable insight into when trends begin to weaken and where potential turning points may emerge.
AUD/JPY momentum is weakening as bearish divergence appears across both daily and weekly timeframes. Matt Simpson notes that "you've got a bearish divergence on both sides there as well", highlighting that price gains are no longer supported by strengthening momentum. This divergence typically signals that buying pressure is fading, even as prices attempt to hold higher levels. As a result, traders may begin preparing for a shift away from trend continuation toward a corrective phase.
AUD/JPY price action is reinforcing downside risk as reversal patterns emerge near recent highs. Simpson points to "this lovely shooting star candles here", which often indicate rejection at elevated levels following a sustained rally. This pattern suggests that sellers are starting to reassert control, increasing the likelihood of a move lower toward support. However, given the broader uptrend, any decline may remain limited unless further bearish confirmation develops.
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--- Written by Lindo Xulu, StoneX TV Journalist
--- Expert: Matt Simpson, Market Analyst at FOREX.com
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