AUDJPY has been trading in a narrow sideways range for a month now, between 76.80 and 74.70. A break in either direction is needed to reveal the pair’s short-term tendency, though in the bigger picture, only a decisive move below 72.70 would call into question the five-month uptrend.
Short-term oscillators detect fading upside momentum and imply that the pair could test the lower bound of its recent range soon. The RSI is pointing down and looks ready to cross below its 50 line, while the MACD seems unable to move above its red trigger line.
In case of further losses, the lower bound of the range at 74.70 could provide initial support. That zone also encapsulates the 50-day simple moving average (SMA), currently at 74.98. Steeper declines could open the door for the 72.70 area, where the 200-day SMA is also roughly located. If the bears overcome this region too, the broader outlook would turn back to neutral, from positive currently.
If the bulls retake the wheel, their first obstacle would be the 76.80 area, which has capped several advances. A successful break would signal the continuation of the broader uptrend, turning the focus to 77.50. Even higher, the 79.80 region could halt buyers, this being the inside swing high of February 2019.
Summarizing, the short-term outlook is neutral as long as the pair holds between 76.80 and 74.70.
