AUDJPY has shed 7.5% year-to-date and is currently trading around 80 pips above the near one-and-a-half-year low of 80.49 hit last Friday.
Despite today’s rebound, the negatively aligned Tenkan- and Kijun-sen lines continue to project a bearish short-term picture for the pair. It is of note that the Chikou Span might be hinting to a somewhat oversold market, rendering today’s recovery “justifiable”.
The pair might be meeting resistance around 81.48 – a previous bottom – at the moment, with an upside break shifting the focus to the area around the current level of the Tenkan-sen at 82.12 as an additional barrier to the upside. The range around the Tenkan-sen also includes the 82 round figure that may hold psychological significance.
Should the pair resume its declines, support could come around last week’s near one-and-a-half-year low of 80.49. Steeper losses would next turn the attention to the 80 handle that may also be of psychological importance.
The medium-term picture is clearly negative: trading is taking place well below the Ichimoku cloud as well as below the 50- and 100-day moving average lines, with both lines maintaining a negative slope. In addition, a bearish cross was recorded in early March when the 50-day MA moved below the 100-day one.
Overall, both the short- and medium-term outlooks are looking bearish at the moment.
