AUD/JPY holds onto the previous day’s corrective bounce off a three-month low after the Reserve Bank of Australia’s (RBA) hawkish commentary, published early Tuesday morning in Asia. Adding strength to the cross-currency pair’s corrective bounce could be the latest recovery in the US Treasury bond yields amid mixed market sentiment.

After falling to multi-week lows at 87.12, the AUD/JPY staged a late recovery and closed above the 88.00 figure, portraying a spinning top indicating neither buyers nor sellers are in control. Nevertheless, the AUD/JPY is consolidating around the 87.00-89.20 range, below the daily Exponential Moving Averages (EMAs), with a neutral to a bearish bias.

Oscillators remain bearish, but the Relative Strength Index (RSI) turned flat, suggesting that selling pressure is waning. Contrarily, the Rate of Change (RoC) portrays sellers are gathering momentum, but they need to bring the AUD/JPY below 88.00, so they could have a chance to drag prices lower.

Therefore, the AUD/JPY’s first support would be the 88.00 mark. Once cleared, the AUD/JPY could dive towards the daily low at 87.12 before stumbling toward the 86.00 mark, ahead of testing March 2022 lows at around 84.59.

Conversely, the AUD/JPY first resistance would be 89.00. Break above will expose the March 20 daily high at 89.23 before testing the 20-day EMA at 89.82. After that, the next supply zone would be the 90.00 figure, followed by the 50-day EMA at 90.66, ahead of 91.00. Nearly oversold RSI (14) challenges AUD/JPY bears even if a downside break of the three-month-old ascending trend line, close to 89.35 by the press time, keeps the pair sellers hopeful. That said, the late 2022 bottom surrounding 87.00 appears as the short-term key support.

AUDJPY will steer a bullish gear from high degree order block

Mar 21 2023