AUDJPY opened with a negative gap today, reaching a new four-month low of 76.77. The pair penetrated the upward sloping channel to the downside raising speculation that the downward move may continue in the daily chart. The price is holding beneath the Ichimoku cloud, while the MACD and the RSI are trending in the negative territory. Still, the stochastic oscillator, which posted a bullish cross within the %K and %D lines in the oversold zone, suggests that a rebound is possible in the short term.
Should the pair strengthen positive momentum as the stochastic indicator signals, resistance could come around the red Tenkan-sen line currently at 78.20 before attention turns to the 40- and 20-SMAs at 79.00 and 79.20 respectively. Above these levels, the next target could be the 79.80 barrier.
However, if prices fail to recoup the negative gap, the focus will shift to the 76.00 handle, taken from the low on September 2016. The 74.50 support registered on July 2017 could be the next key level to watch.
In brief, AUDJPY has been trading below the upward sloping channel today, increasing chances for more bearish actions.
