In February, AUDJPY recorded its worst monthly performance since April 2016, posting a loss of 5.8%. The negative sentiment remains strong in the first days of March, with prices hitting a 10-month low of 81.59 today but momentum indicators signal that the market could be overextended in the four-hour chart.
The Relative Strength Indicator (RSI) has been trending below 30 in oversold territory during the past two days, while Stochastics have posted a bullish cross below 20, flagging that upside movements might be underway in the near-term. The trend, however, might remain to the downside as long as prices continue to trade below the 20-period simple moving average line (SMA) and the Ichimoku cloud.
Should the pair head lower, the 81.00 key-level, last seen in November 2016, could provide nearby support. A closing bar below this mark could open the door to the 80.00 and 79.00 psychological marks.
To the upside, AUDJPY could meet resistance at the red Tenkan-Sen line at 82.35 before it extends its recovery to the 20-period SMA at 82.80. If the market manages to step above this area, bulls’ radar could target the previous-support handle of 83.29 and then the 50-period SMA at 83.51.
