AUD/JPY traded higher today, after hitting support slightly above the 82.10 zone. However, the pair remains below the downside resistance line drawn from the high of November 1st, and thus, we would treat the current recovery as a corrective move. The short-term outlook remains cautiously negative in our view.
We believe that the bears may take charge again at some point soon and push the action lower, with a potential dip below 82.10 confirming a forthcoming lower low. The next support to consider may be at around 81.35, a territory which provided resistance on September 28th, October 5th and 6th, the break of which could pave the way towards the low of October 6th, at 80.55.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from near 30 and is now close to its 50 line, while the MACD, although negative, has crossed above its trigger line. Both indicators detect slowing downside speed, which suggests that the rate may continue drifting higher for a while more before the bears take charge again, perhaps until it hits once again the downside resistance line drawn from the high of November 1st.
In order to start examining the bullish case, we would like to see a break above the 84.50 zone, marked by the inside swing lows of November 2nd and 3rd. This will confirm a forthcoming higher high on the daily chart and may initially pave the way towards the 85.20 territory, marked by the high of November 4th. Another break, above 85.20, could extend the recovery towards the 86.05 barrier, or the 86.23 zone, defined as resistances by the highs of November 1st and October 21st respectively.
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