AUD/JPY traded lower yesterday after hitting resistance at 85.50. However, the retreat was stopped near the 83.90 barrier, marked by the inside swing peak of Feb. 10, still above the upside support line drawn from the low of Jan. 28. Therefore, we will class the retreat as a corrective phase of the broader upside path.
Even if the setback continues for a while more, below 83.90, we could see the bulls taking charge from near the aforementioned upside line. This could result in an advance back near the 84.85 barrier, marked by today’s current high. If they don’t stop there, we may see them climbing towards the 85.50 hurdle, marked by the high of Mar. 7. Another break above that hurdle will confirm a forthcoming higher high and may see scope for advances towards the 86.05 or 86.23 levels, marked by the high of Nov. 1 and Oct. 21.
Taking a look at our short-term oscillators, we see that the RSI hit its 50 line from underneath and ticked down again, while the MACD, although positive, lies below its trigger line, pointing south as well. Both indicators add to the view that yesterday’s retreat may continue for a while more before and if the bulls decide to retake charge.
The outlook could turn bearish upon a break below 82.75, support marked by the low of Feb. 28. This could pave the way towards the 82.20 or 82.00 barriers, with the latter marked by the low of Feb. 24. If the bears are unwilling to surrender near those levels, we may experience extensions towards the low of Feb. 14, at 81.55, or the low of Feb. 4, at 81.30.
Slightly lower lies the low of Feb. 1, at 80.90, which could also get tested.
