AUD/JPY opened with a positive gap on Monday and during the Asian morning, it managed to break above the resistance (now turned into support) barrier of 83.40, as well as above the downside resistance line taken from the peak of the 13th of March. The pair continued to surge during the European morning as well. On top of that, the price structure remains of higher peaks and higher troughs above the short-term uptrend line drawn from the low of the 9th of May, and thus, we see a positive near-term picture.
We would expect the bulls to challenge the 83.95 soon, but we would like to see a decisive break above 84.10 before we get confident on larger bullish extensions. Such a break is possible to set the stage for our next resistance territory of 84.55, defined by the peak of the 13th of March.
Looking at our short-term oscillators, we see that the RSI lies above its 70 line, while the MACD stands above both its zero and trigger lines. These indicators detect positive momentum and support the case for the pair to continue drifting north in the near future. However, the fact that the RSI has turned down keep us mindful that a corrective retreat may be looming before the bulls decide to seize control again, perhaps for a test near the 83.40 obstacle as a support this time.
That said, even if this is the case, we would still see a positive short-term picture. We would still see a decent likelihood for the bulls to jump in from near 83.40. We would like to see a clear dip below that support and the short-term uptrend line before we start examining the case of a near-term bearish reversal. Such a move could initially aim for our next support of 83.05. Another break below 83.05 could target the 82.80 zone, marked by the inside swing peak of the 14th of May.
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