After a strong move higher, AUD/JPY reversed sharply back down as “risk off” was back on the table. The pair dropped heavily yesterday but found good support at around 82.05 zone. That said, the pair is still above the upside support line, drawn from the 28th of June, which still gives a bit of hope for the bulls. That said, the pair could continue somewhat lower, as the yen-buying could continue.
If we get another test of the 82.05 zone and eventually a break of it, we could see the pair sliding towards the aforementioned support line, from where the bulls could jump in again. If they do so and drive the rate back above the 82.05 zone, then we may see them aiming for the 82.57 territory. Another move above 82.57 could interest more bulls to step in and drive AUD/JPY higher. We could then see a full recovery of yesterday’s drop and the rate going back to the recent highs at around the 83.10 area.
Both of our indicators are currently in support of some further retreat, at least toward the uptrend line. The RSI is now slightly below 50 and pointing a bit lower. The MACD, even though above zero, it has now moved below its trigger line and continues to slide.
For us to become bearish, we would need to see a break and a close below that support line, in order to consider a drop to 81.60. If the bears remain in control, Aussie/Yen could continue falling towards the 81.27 level, marked by the low of the 5th of July. Slightly below that lies the 81.00 area, which acted as good support recently, on the 2nd of July and a few times in June.
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