Featured Trade: AUD/JPY pushed up towards key minor range resistance ahead of RBA

AUD/JPY may see another round of minor push down within range configuration.

Short-term technical outlook on AUD/JPY (01 Apr)



click to enlarge charts

Key elements

  • In our previous “Featured Trade” idea dated on 15 Mar, the AUD/JPY cross pair has indeed staged the expected push down and hit the near-term supports of 78.35 and even the 77.50 medium-term range support of 77.50 after a test on the 79.35 key short-term pivotal resistance (click here for a recap).
  • Right now, the pair has staged a bounce of 130 pips since 28 Mar 2019 minor swing low to test the minor descending trendline in place since 26 Feb 2019 high now acting as a resistance at 79.20 reinforced by the upbeat China manufacturing PMI data (official & Caixin) for Mar that has indicated growth as both readings have inched back up above the 50 level after a contraction phase since Dec 2018.
  • Interestingly, the pair is also hovering right below the 79.35 key short-term pivotal resistance with weak short-term momentum readings The 1-hour RSI oscillator has flashed a bearish divergence signal at its overbought region coupled with the daily RSI oscillator right below a corresponding significant resistance at the 60 level.

Key Levels (1 to 3 days)

Intermediate resistance: 79.20

Pivot (key resistance): 79.35

Supports: 78.70 & 78.00

Next resistance: 79.85 (key medium-term pivot)

Conclusion

If the 79.35 key short-term pivotal resistance is not surpassed, the AUD/JPY may see another round of push down within its medium-term range configuration in place since Jan 2019 to target the next near-term supports at 78.70 and 78.00.

On the other hand, a break above 79.35 negates the bearish tone for an extension of the on-going rebound to test the 79.85 key medium-term pivotal resistance (the medium-term range top & pull-back resistance of the former long-term secular triangle range support from Oct 2008 low).

Charts are from eSignal



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