AUDJPY paused last week’s sell-off at 74.24 and above September’s trough of 73.96, reviving some hopes that a downtrend could be avoided.
In the four-hour chart, the pair is currently testing the 20-period simple moving average (SMA) within the 74.00 territory as the MACD keeps distancing itself above its red signal line and the RSI continues to recover towards its 50 neutral mark.
Despite the above encouraging signals, the bulls may not take the helm yet unless the price breaks above the 20-period SMA (74.86), which is also the middle Bollinger band. A clear violation of this border could see an extension towards the 75.65 restrictive region, while higher, traders would be looking for a sustained move above the 200-period SMA currently around 76.00.
In the event the pair resumes negative momentum, the bears may push harder to breach the floor between 74.24 and 73.96. A successful move below that area would stretch September’s downfall probably towards the 73.00-72.70 supportive zone and hence further worsen the outlook.
Summarizing, AUDJPY could confirm a bullish bias above the 74.86 resistance. If not, then a return to the 74.24 base could be inevitable.
