Technical Analysis – AUDJPY holds onto bullish bias but risks further consolidation

Raffi Boyadjian, XM Investment Research Desk

AUDJPY hit a one-month high of 75.26 on Tuesday as it continued to increase positive momentum following last week’s bounce off the 20-day moving average (MA). The RSI is currently trending higher above 50 and hasn’t yet reached overbought levels, indicating there is scope for additional gains in the coming days. However, the MACD remains flat despite the recent gains, suggesting it’s too soon to predict an end to the neutral picture in the short to medium term.

If the upside bias strengthens further, AUDJPY is likely to meet resistance at the June top of 76.77. Stronger gains could revert the old support regions of 77.45 and 78.55 into resistance, while higher up, attention would turn to another former barrier around 79.80.

To the downside, immediate support is being provided by the 20-day moving average at 74.17. If broken, the pair could slide towards the 50-day MA, which recently crossed above the 200-day one. The two MAs could form a tough support zone, which currently lie between 72.25 and 72.94. If sellers are able to penetrate this obstacle as well, the next critical level is likely to come from the psychologically important 70 handle.

In the bigger picture, AUDJPY remains in an uptrend, but failure to surpass the previous top of 76.77 soon would risk shifting the outlook to neutral, while in the near-term, a drop below the 50- and 200-day MAs would mark the start of a new negative phase.