Technical Analysis – AUDJPY unlocks fresh highs; next key resistance 76.26
Posted on November 8, 2019 at 8:24 am GMT
Christina Parthenidou, XM Investment Research Desk
AUDJPY stretched to a fresh 3 ½-month high of 75.65 and near the 200-day simple moving average (SMA) on Thursday but it found hard to close comfortably above the 50% Fibonacci of the downleg from 80.70 to 69.94.
The price is currently trading slightly lower and even though the RSI and the MACD are fluctuating at a softer pace, the bullish bias is still intact as long as the former holds well above its 50 neutral mark and the latter remains above its red signal line.
A rally above the 200-day SMA could stall somewhere between the July high of 76.26 and the 61.8% Fibonacci of 76.60. Breaking that area, the uptrend off 69.94 could gain some extra legs, with resistance probably moving up to 77.70 – a strong support area in the first three months of the year. Higher, the way would open towards the 78.68-79.00 region.
Failure to clear the 50% Fibonacci of 75.31 would shift attention down to the 20-day SMA. The 38.2% Fibonacci of 74.00 could also curb downside corrections if the sell-off extends lower, while beneath that, traders would lose confidence on the upward pattern, with the next obstacle probably coming within the 73.00-72.47 zone.
In the medium-term picture, the pair is in a sideways move and only a decisive close above 76.60 would mark a positive direction.
Summarizing, AUDJPY maintains a bullish but weaker short-term bias, with the next key resistance awaited to appear in the 76.26-76.60 area. Breaking that wall, the positive sentiment could also stretch into the medium-term timeframe.