The AUD/JPY pair has formed a ‘shooting star’ pattern, indicating a possible continuation of the downtrend if the key support level at 96.15 is broken. Currently, the pair is trading at 96.97, showing a gain of 0.68% from the day’s low.
Technical Outlook for AUD/JPY
Despite a temporary spike above 97.00, the AUD/JPY remains in a downtrend. The Relative Strength Index (RSI) is below its neutral line, hinting at more selling pressure. The recent ‘shooting star’ candlestick pattern suggests a bearish bias, with a potential drop below 96.15 leading to further losses.
If the support at 96.15 is breached, the next levels to watch are 96.00 and 95.00. A deeper decline could target the Tenkan-Sen at 94.43. On the upside, a break above 97.85 could push the pair towards 98.00 and 98.74.
AUD/JPY Price Action – Daily Chart
What Drives the Australian Dollar?
The Australian Dollar (AUD) is influenced by multiple factors including interest rates set by the Reserve Bank of Australia (RBA), the price of Iron Ore (a major export), the health of the Chinese economy (its largest trading partner), inflation, growth rate, and Trade Balance of Australia. Market sentiment also plays a crucial role in determining the strength of the AUD.
Breaking Down the Analysis:
The AUD/JPY pair is currently facing a critical juncture as it hovers near the key support level of 96.15. A breach below this level could trigger further downside movement towards 96.00 and 95.00. On the other hand, a break above 97.85 could lead to a challenge of the 98.00 mark and potentially higher levels. Traders and investors should closely monitor these levels to gauge the direction of the AUD/JPY pair and make informed decisions based on the technical analysis provided.