As the AUD/JPY bulls continue to push the pair higher, they are aiming to close the bullish engulfing pattern with an impressive 1.80% rise to 95.90 in Wednesday’s session. This upward momentum follows a trend reversal in early August, with the pair now facing resistance at 96.50. While there is potential for further gains, a consolidation period suggests that bears may still have control.
The Relative Strength Index (RSI) currently sits at 18, indicating an oversold condition. However, the Moving Average Convergence Divergence (MACD) shows decreasing red bars, suggesting a potential shift in momentum towards the bulls.
AUD/JPY Daily Chart
Trading below its 20, 100, and 200-day Simple Moving Averages (SMA), the AUD/JPY pair confirms an overall bearish outlook. A break below the 94.60 level could lead to further declines, with major support at 94.00. On the upside, resistance is seen at 96.00 – 96.50, with a break above potentially improving the negative outlook.
Analysis:
The AUD/JPY pair is currently in a critical phase, with bullish momentum building but facing resistance at 96.50. Traders should watch for a potential break above this level to confirm a shift towards bullish sentiment. However, a failure to break resistance could see the pair continue in its consolidation phase, with bears maintaining control. It is important for investors to monitor key support and resistance levels to make informed decisions about their trades.