AUDJPY recently fell through the neckline of a double top pattern to confirm that a reversal from its uptrend is in order. Price looks prime for a retest of the broken support before heading further south.

The Fibonacci retracement tool shows that the 50% level lines up with the broken support around 80.20 while the 61.8% Fib is close to the moving averages’ dynamic inflection points.

On the subject of moving averages, the 100 SMA just crossed below the 200 SMA to confirm that the path of least resistance is to the downside or that the selloff is likely to gain traction.

Stochastic is still heading higher, so price could follow suit while buyers have some energy left. The oscillator has room to go before indicating overbought conditions, so buyers could stay in control for a bit longer.

The Aussie could be in for a lot of volatility this week as the Land Down Under gears up to release its December jobs report. Strong results could confirm that the economy is weathering the pandemic quite well compared to its peers while weak figures could undermine confidence in the Australian economy.

Risk-taking could also be a major catalyst for forex price action throughout the week, especially with the US Presidential inauguration coming up. Fears of protests and political chaos are keeping traders on edge and holding on to safe-havens like the yen, but a relief rally might follow.

Continuation of risk-off flows on account of vaccine concerns and the rapidly rising number of COVID-19 cases from the new strain of the virus could keep the Aussie’s gains in check and allow traders to buy up the lower-yielding yen. Note that the BOJ is due to make its policy decision this week, but no rate changes are eyed.