Technical analysis – AUDJPY declines sharply, short-term bias back to negative
Posted on December 6, 2018 at 2:42 pm GMT
Marios Hadjikyriacos, XM Investment Research Desk
AUDJPY posted hefty losses after rising to a five-month peak of 83.90 in early December, falling back below its 200-day simple moving average (SMA) to find support near its 50-day SMA. The pair is now trading at a one-month low, and the short-term bias seems to have shifted back to negative, though a decisive close below the 50-day SMA is needed to confirm that.
Short-term oscillators support the notion, as the RSI just dipped below its neutral 50 line, while the MACD recently crossed beneath its red trigger line; a bearish signal.
Further declines could encounter support near the 80.47 zone, marked by the peaks of October 19. Even lower, the October 25 top of 79.80 would come into view, a level much more visible on the 4-hour chart. Lower still, buy orders may be found near the round figure of 79.00.
On the upside, a first wave of resistance to advances may come at 81.40, the November 23 trough. A bullish break would open the way for the 200-day SMA at 81.83, with even steeper moves higher seeing scope for a test of the 83.20 territory – defined by the highs of November 29.
Summing up, the short-term picture seems to have turned negative, but a clear close below the 50-day SMA is required to validate that.