AUD/JPY has been in a recovery mode since yesterday when it hit support near the round figure of 60.00. At the time of writing, the rate is testing yesterday’s peak at around 65.60, where a break may extend the rebound. However, the rate remains below the downside resistance line taken from the high of February 21st, and thus, we would still consider the near-term outlook as negative, and the current rebound as a corrective move.
As we already noted, a move above 65.60 may extend the recovery, perhaps towards the prementioned downside line. We believe that there is a decent chance for the bears to jump back into the action from near that line and perhaps drive the battle back below 65.60. Such a move may pave the way towards today’s low of 62.80, the break of which may allow the slide to continue for another test near the round number of 60.00.
The RSI has just crossed above its 50 line, but then, it started to flatten. The MACD, although negative, lies well above its trigger line, and appears to be headed towards zero. Both indicators support the notion for some further recovery, but the flattening of the RSI enhances our view that further advances may stay limited.
In order to totally abandon the bearish case, at least in the near-term, we would like to see a break above 67.65. This would also confirm the break above the aforementioned downside line and may initially open the path towards the 69.00 area, or the 69.70 hurdle. If the bulls are not willing to stop there either, then we may see them climbing towards the 71.47 territory, which is marked as a resistance by the highs of March 3rd and 4th.
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