AUDJPY entered a consolidation phase on the four-hour chart after the bounce on the eleven-year low of 66.33 on Monday, but the move did not change the bearish structure of lower highs and lower lows in the bigger picture.
The fact that the price is below its downward-sloping simple moving averages (SMA) further reduces the case of a trend reversal.
In momentum indicators, however, some improvement has been detected. The RSI looks to be gaining strength towards its 50-neutral mark, the Stochastics are pointing up, while the MACD has rebounded and is heading towards its red signal line, all hinting that the pair may remain above its recent lows in the short-term.
On the upside, the bulls should close above the 67.20-67.50 area formed by the 23.6% Fibonacci of the 76.52-66.33 downleg and the middle Bollinger band in order to revisit this week’s highs printed near the 38.2% Fibonacci of 69.00. Beating that obstacle, the rally may get new legs towards the 50% Fibonacci of 70.43, while higher, the next stop could be around the 71.20 resistance.
Alternatively, a decisive step below the 65.50 support level would bring the eleven-year low of 66.33 back into focus. Any violation at this point could trigger a sharper downfall, probably towards the 62.00-61.50 former restrictive zone.
In brief, AUDJPY is expected to record a neutral session above its recent 11-year tough in the short-term, simultaneously keeping the bearish structure in the bigger picture valid.
