AUDJPY picked up from where it left yesterday, adding to its gains to record a three-month high of 86.44. The pair currently looks set for its fifth straight day of gains.
The RSI is well into bullish territory and maintains a steep positive slope. It is noteworthy though, that at 73 it has exceeded its overbought threshold (at 70). This might be an indication that the recent uptrend is overextended.
The area around 86.50 has been a heavily congested one in previous months and could provide resistance. Further up, the 87.00 handle might act as a psychological barrier, while a break above would shift focus to the four-month high of 87.48 from March 16.
On the downside, the 61.8% Fibonacci retracement at 85.60 (February 16 – April 19 downleg) could offer support. Should this be violated, the 85.00 mark and 50.0% Fibonacci at 84.81 might form another support area.
In the bigger picture, the recent uptrend leading the price comfortably above the 50- and 200-day moving averages (MAs) has reinforced the bullish outlook which was in danger of turning neutral. Also notice that both MAs are currently upward sloping.
Summing up, both the short- and medium-term outlooks are bullish at the moment.
