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AUD/JPY Retreats; Watch for Buyers on the Dip

Pullback after Bullish Continuation Breakout:
The Australian dollar was strong last week, but is falling sharply across the board so far this week. When we look at the AUD/JPY chart, we can see a bullish market in 2014. After several months of consolidation under 96.50, price continued the uptrend in August. Last week, price stalled at 98.67 and this week AUD/JPY was unable to break above it, instead, giving us an engulfing candle that signals bearish reversal at least in the short-term.

(AUD/JPY Daily Chart 9/10)

Buyers on the Dip: In the daily chart we can see that if price comes down into the 96.00-96.50 area, AUD/JPY would be testing the previous consolidation resistance area and the 50-day SMA. If the RSI is also back around 40 at this point, we can expect a bullish attempt. If price does indeed hold above 96.00, there should be upside risk at least back to the 98.60 area. 

If price breaks below 95.50 however, it would clear below the 100-, and 50-day SMA putting the market back into consolidation especially if the RSI also falls below 40. At that point, we would have pressure toward the 94.00 handle.