AUD/JPY Technical Outlook: Rally Rejected At Resistance

The Australian Dollar has traded within a nearly 4% range against the Japanese Yen since the start of May trade with the AUD/JPY pullback from a key resistance range last week risking further losses. Here are the levels that matter as we head into major event risk later this week.

AUD/JPY DAILY PRICE CHART

AUD/JPY Price Chart - Daily Timeframe

Technical Outlook: In this week’s Technical Perspective on AUD/JPY, we highlighted a well-defined price range on the weekly charts while noting that, “from a trading standpoint, I’ll favor fading strength near-term but respect this range with a weekly close needed to validate a break on either side.” The daily chart shows price trading within a shallow ascending channel formation with daily RSI marking strong bearish divergence into the monthly high. The focus remains on this turn from the range-highs with the near-term risk lower while below 84.25.

Initial daily support rests with the monthly open at 82.34 backed closely by the 61.8% retracement of the March advance at 82.04. Ultimately a break/close below the lower parallels would be needed to mark resumption of the broader downtrend. A topside breach of the monthly opening-range highs shifts the focus towards subsequent resistance objectives at the 85-handle backed by the 200-day moving average / 50% retracement at 85.35/40.

AUD/JPY 120MIN PRICE CHART

AUD/JPY Price Chart - 120min

Notes: A closer look at AUD/JPY price action sees the pair turning from Fibonacci resistance today at 84.12 with an outside-reversal bar off the highs shifting the near-term focus lower. Initial support targets are eyed at the weekly open at 82.95 backed by 82.52. Key support rests at 82.04/21 where the 100% extension and the 61.8% retracement converged on parallel support. A breach above today’s highs puts us neutral, with a rally surpassing 84.48 needed to fuel the next leg higher targeting 84.79 and the 100% extension at 85.01.

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