VSheart of the week – AUD / JPY

Potential for AUD / JPY to push to the top of the medium term range

Short term technical analysis

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Time stamp: July 4, 2021 at 1:00 p.m. SGT

Source: CMC Markets

  • Over the coming week, Australia’s central bank, RBA, will release its latest monetary policy decisions and guidance on Tuesday, July 6. Therefore, now is the time to decipher the latest key technicals, trend bias and key levels on a related currency pair, the AUD / JPY.
  • Since its 52 weeks of 85.81 printed on May 10, 2021, the AUD / JPY has moved in a mid-term side-to-flat-range pattern for nearly three months as the mid-term high of 85.81 failed to arrange a proper bullish breakout from its March 18 high at 85.45 and fell 367 pips to retest medium term side / flat support at 82.30 / 14 on June 27.
  • Since hitting its June 27 low, short-term momentum has started to turn positive where the 4-hour Relative Strength Index (RSI) formed a series of “higher lows” after being exited its oversold region and did not reach an extreme overbought level. level yet. In addition, the current AUD / JPY price action started to move towards a minor ascending channel after the recent drop from its minor high of 84.30 printed on June 28 and subsequently made a rebound just at the 61.8% Fibonacci retracement of the previous one. climb from the June 27 low to the June 28 high that coincides with the June 30 minor swing low.
  • These observations suggest that the short-term bullish momentum may have resurfaced to support a further potential surge in price action to retest the top / resistance of the mid-term three-month range.
  • Watch the key near term support at 82.85 for a further potential push towards the intermediate resistance at 84.30 and a breakout above this reinforces a new bullish move up / mid term resistance at 85 , 40. However, a 4 hour close below 82.85 cancels the bullish tone for a pullback to retest support at the medium term range 82.30 / 14.


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