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FX Analysis

Chart of the week – AUD/JPY potential push up to medium-term range top

Chart of the week – AUD/JPY 

AUD/JPY potential push up to medium-term range top

Short-term technical analysis

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Time stamped: 4 Jul 2021 at 1:00pm SGT

Source: CMC Markets

  • In the coming week, the Australian central bank, RBA will release its latest monetary policy decision and guidance on Tuesday, 6 July. Hence, it is now timely to decipher the latest key technical elements, trend bias and key levels on a related FX pair, the AUD/JPY.
  • Since its 52-week of 85.81 printed on 10 May 2021, the AUD/JPY has been evolving in a medium-term sideways/flat range configuration for almost three months as the 85.81 medium-term swing high failed to stage a proper bullish breakout from its 18 March high of 85.45 and declined by 367 pips to retest the medium-term sideways/flat range support at 82.30/14 on 27 June.
  • Since hitting its 27 June low, short-term momentum has started to turn positive where the 4-hour Relative Strength Index (RSI) has shaped a series of “higher lows” after it exited from its oversold region and has not reached an extreme overbought level yet. In addition, current price action of the AUD/JPY has started to evolve into a minor ascending channel after the recent drop from its 84.30 minor high printed on 28 June and thereafter it has staged a rebound right at the 61.8% Fibonacci retracement of the prior push up from 27 June low to 28 June high which coincides with the 30 June minor swing low.
  • These observations suggest that short-term upside momentum may have resurfaced to support a further potential push up in price action to retest the three-month medium-term range top/resistance.
  • Watch the 82.85 key short-term pivotal support for a further potential push up towards the 84.30 intermediate resistance and a break above it reinforces a further up move towards the 85.40 medium-term range top/resistance. However, a 4-hour close below 82.85 negates the bullish tone for a slide back to retest the 82.30/14 medium-term range support.