AUDJPY inched lower in the last couple of sessions, after touching a 6-week high at 71.00, but the series of higher highs and higher lows is still intact on the daily chart, keeping the broader outlook positive. Endorsing the improved sentiment, the 50-day simple moving average (SMA) has turned higher, while the pair is also trading above an upside support line.
The latest pullback is also reflected in the RSI, which has turned lower but remains above its 50 line, whereas the MACD looks to have flattened above its red trigger line.
If the latest wave lower continues and the bears pierce back below the 71.00 region, support may be found near the intersection of the middle Bollinger band near 69.30 and the upward-sloping support line. If violated too, the focus would then turn to 68.60, ahead of the congested 67.60 area, where the 50-day SMA and lower Bollinger band are also located.
If the bulls retake the wheel, their first target would be the 71.00 handle, which if penetrated would reaffirm the positive structure and open the way for a test of 71.50. Even higher, the 200-day SMA near 72.00 could stall the advance ahead of the previous support (now-turned-resistance) territory of 72.35.
In short, the outlook now seems bullish. For that to change, the bears would need to punch below the intersection of the 50-day SMA with the lower Bollinger band and 67.60 zone.
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