AUDJPY fell aggressively in recent weeks to touch an 11-year low of 59.85, where the pair found fresh buy orders and subsequently rebounded. That said, the price structure on the daily chart still points to a broader downtrend, something reinforced by the ‘death cross’ of the 50-day simple moving average (SMA) below the 200-day one. Moreover, the inability of the bulls to pierce above 67.70 suggests that upside momentum is fading.
Short term oscillators paint a mixed picture. Whereas the RSI has turned down again, in line with the latest price action, the MACD continues to rise above its red trigger line.
If the bears stay in control and pierce below the 65.20 mark, their next target would probably be the 62.90 zone. Another negative break would turn the focus back to 59.85. Even lower, the 58.00 handle could provide support, as it did back in December 2008.
On the upside, if buyers retake the wheel, the first obstacle might be the 67.70 region. A clear close above that barrier could turn the near-term outlook to a more neutral one, setting the stage for a test of the 69.15 area initially.
Summarizing, despite the latest rebound, the picture is still negative. That said, a break above 67.70 could bring the bearish outlook into question.
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