The AUD/JPY pair strengthened as gold, copper edged up about a month ago. Since today’s decision by the RBA to leave interest rates at current 2%, the AUD keeps growing and the growth could continue in the short-term before the pair enters a correction.
Support and resistance
The pair is trading just underneath the 61.8% short-term retracement at the level of 85.72.
On the monthly chart, the RSI and Composite are heading up towards their MA’s. The RSI remains in the bullish zone, currently at 40.5.
On the daily chart, the price has bounced off the middle MA of Bollinger Bands and is growing. The RSI and Composite start diverging but have not formed a clear divergence yet. So there is a chance the price will do some work around the middle MA. However, the pair broke down its trend line in the beginning of September and as 13, 65 and 130 period MA’s are directed downwards, the medium-term trend remains descending.
On the 4-hour chart, Bollinger Bands remain quite bearish as the price keeps growing along the upper MA of the indicator regularly closing above it. The price MA’s and the indicators’ MA’s stay bullish however. The RSI and Composite formed a divergence suggesting a downward movement approaching.
Support levels: 85.16 (EMA130 on the 4-hour chart), 84.80 (middle MA of Bollinger Bands, EMA65 on the 4-hour chart), 83.64 (lower MA of Bollinger Bands), 82.78 (end of August low), 82.12 (psychologically important level),
Resistance levels: 85.72 (61.8% retracement for the short-term trend, upper MA of Bollinger Bands), 86.89 (50% retracement for the short-term trend), 87.52 (61.8% retracement for the medium-term trend), 88.61 (long-term trendline), 89.25 (psychologically important level).
Long positions can be opened from the level of 85.77 with the target at 86.60 and stop-loss at 85.47.
Short positions can be opened from the level of 84.74 with the target at 83.74 and stop-loss at 85.16.