Inverted hammer kept AUD/JPY bears awake last night

An umbrella line on the AUD/JPY daily chart has been confirmed by yesterday's close.

An inverted hammer formed two days ago already provided a tentative clue that the support was near. However, it was not until we had yesterday's close above the hammer's real body that we received a visual reinforcement that the support could be solid.

Those who shorted at the close of the inverted hammer are now in a losing position. The longer the market hovers above the inverted hammer's real body, the more likely those shorts will cover.

This could spark a short covering rally that could lead to bottom pickers going long.