AUDJPY came under sharp sell-off on Thursday, diving towards 70.27 for the first time in more than nine years. With the RSI fluctuating in oversold area below 30, a rebound is likely in the short term. Yet the falling MACD which trends under its red signal line suggests that downside pressures may dominate.
An upside extension could pause near 0.76 which could be of psychological importance, while even higher the 0.7750 level could halt upside forces as it did last week. If the bulls overcome the latter too, a stronger barrier is expected to appear around 78.67, identified by the lows on September 7.
On the other hand, if weakness persists, the pair would likely retest support between 73.50 and 0.72 before hitting the 70.27 bottom. Under that trough, the way could open towards the 67.00 area last visited in 2009.
In the bigger picture, today’s freefall turned the outlook increasingly bearish, with the negatively sloped moving averages signaling that the bear market could stay in place for longer.
