AUD/JPY traded lower today, breaking below the 75.55 barrier, to find support near the 74.90 zone. Overall, the rate continues to trade below the downside resistance line drawn from the high of August 31st, while today’s fall has brought it below all three of our moving averages on the 4-hour chart. In our view, all these signs paint a cautiously negative picture for now.
Another round of selling may bring the rate back near the 74.90 support zone, the break of which may trigger declines towards the 74.55 area. Another break, below 74.55, could encourage the bears to shoot for the 74.00 key hurdle, which prevented the rate from moving lower on September 24th and 25th.
Shifting attention to our short-term oscillators, we see that the RSI lies below 50, while the MACD, although positive, runs below its trigger line and points down. Both indicators suggest that the pair may start gaining downside speed soon, but the fact that the RSI has just turned up suggests that we may get a corrective bounce before the next leg south.
On the upside, a break above 76.40 is the move that would make us start considering the bullish case. Such a move would also take the pair above the aforementioned downside line and may initially pave the way towards the peak of September 18th, at 76.85. If that obstacle is not able to stop the advance, its break may set the stage for extensions towards the high of September 15th, at 77.50.
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