AUDJPY came under buying interest yesterday from near the 87.25 zone, which offered support on December 20 and January 3, as well as back on May 12. In the bigger picture, the pair seems to be trading in a trendless mode, establishing a new sideways range between that area and the 93.00 hurdle.
The moving averages are lying above the current price, but in a sideways action it may be more prudent to rely on momentum studies, like the RSI and the MACD. The former rebounded from its 30 line, while the latter, although negative, shows signs of bottoming. Both indicators suggest that there is room for some further recovery within the aforementioned range.
The confirmation could come upon a break above the 90.25 level, marked by the inside swing lows of February 3 and 10. Such a move could see scope for advances towards the upper bound of the range, at around 93.00. That said, the move signaling that the bulls are in full control may be a clear breach of that hurdle.
On the downside, a dip below 87.25 could turn the picture back to bearish as it would confirm a lower low, not only on the daily chart, but on the bigger timeframes as well. The bears could then get encouraged to dive all the way down to the 84.60 territory, defined as support by the low of March 15, 2022.
To recap, AUDJPY rebounded strongly from near the 87.25 territory yesterday, but the broader outlook suggests a new sideways range between that support area and the 93.00 zone. The next directional bias may be determined by the pair’s escape outside those bounds.
