From around mid-March and up until now, AUD/JPY has been trading within a slightly rising channel, but with violent ups and downs, something that reveals traders’ indecision to establish a clear trending path.
After hitting the upper bound of the aforementioned channel yesterday, the pair has started to tumble, so we will stick to the downside scenario for the time being. AUD/JPY is currently testing the 83.10 mark, which is acting as a good level of support. A break below that mark could trigger further selling and the pair could end up testing the 82.80 area. If that area is not able to withhold the rate from dropping lower, then this could become a real feast for the bears, whose main target in the longer-term could be the lower bound of the channel.
It looks like that the RSI and the MACD are also in favour of the downside scenario. The RSI is below 50 and pointing lower. The MACD is also on a downslope, targeting its 0 mark, and the bars are way below the trigger line. All this could be interpreted as strong sign of weakness.
On the upside, a move back above the 83.38 level and then a test of the 83.77 zone, could be seen as a sign that the bulls are not yet ready to give up without a fight. A break of the 83.77 to the upside could interest more bulls to join in and drive the pair towards the 84.25 initially, and then maybe even to test the upper bound of the previously mentioned channel.
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