After yesterday’s decline, AUD/JPY managed to find good support around the same place, where it got held on the 10th and 23rd of October, that’s around the 79.05 area. The pair is showing some strength today by correcting higher. This move could be limited due to the short-term downside resistance line drawn from the high of the 2nd of October. This is where the pair could get held and if the bears manage to drag it back below the 79.50, we could capture a bit more of the potential downside.
If this is the case, we could then aim for another test of the previously mentioned support zone at 79.05. This is where the bulls and the bears could start battling it out again over who will take control from there. Certainly, if the bears remain in control, we could finally see a break below that support area, which could open the path towards the 78.75 support level, marked near the lowest point of September.
The alternative scenario here could be if AUD/JPY breaks the short-term downside resistance line and also moves above the psychological 80.00 hurdle, marked by yesterday’s high. This way we could start looking at the pair’s possible move towards the 80.40 obstacle, a break of which could lead to a slight move higher to test the 80.60 zone, marked by the high of the 10th of October.
The RSI is currently just slightly below 50 but keeps pointing higher. The MACD is negative but looks like it could also like to make a push a bit higher, as it is now just a bit above the trigger line. These indicators are in line with our view that the pair could trade slightly higher before the bears decide to pull the trigger again.
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