- AUD/JPY refreshes intraday high during bearish consolidation near two-week low.
- Sustained trading below 200-DMA, five-week-old falling trend line favor sellers.
- Horizontal area from mid-February becomes the key hurdle to the north.
AUD/JPY picks up bids to 80.50, up 0.05% near intraday high, during Tuesday’s Asian session. In doing so, the cross-currency pair snaps a two-day downtrend while bouncing off the lowest since July 21.
Even so, the quote remains below 200-DMA, not to forget a downward sloping trend line from June 25.
Given the weaker conditions of the RSI line backing the pair’s sustained trading below the important moving average and resistance line, AUD/JPY bears are likely to keep the reins ahead of the RBA.
Should the Aussie central bank convey a dovish message, as it is likely to due to the Delta covid variant outbreak in Australia, AUD/JPY may not hesitate to challenge July’s low, also the lowest since early February, surrounding 79.85.
During the fall the 80.00 threshold may offer an intermediate halt whereas the 50% Fibonacci retracement level of October 2020 to May 2021 upside, near 79.50, becomes crucial support to watch afterward.
On the flip side, a clear break of the stated resistance line near 80.90 will need validation from the 81.00 round figure before confronting the 200-DMA level close to 81.50.
Even if the AUD/JPY bulls manage to cross the 81.50 hurdle, a horizontal area comprising multiple levels since February, around 82.00–82.15 will be a tough nut to crack for them.
Overall, AUD/JPY trend remains bearish ahead of the key RBA rate decision, which is likely to extend the downtrend. However, any surprise may help the pair to break the immediate resistances.
Read: Reserve Bank of Australia Preview: Dovish twist as lockdowns continue
AUD/JPY: Daily chart
Trend: Bearish
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