The AUD/JPY currency pair is witnessing a notable shift, as it gains for the second consecutive day, currently trading around 98.20 during the Asian trading session. This movement suggests a potential change in market sentiment, shifting from a bearish to a bullish outlook. The 14-day Relative Strength Index (RSI) is currently hovering just below the critical 50 level, which, if surpassed, would indicate a formal transition to positive momentum.
An analysis of recent trading patterns reveals that the nine-day Exponential Moving Average (EMA) continues to sit beneath the 50-day EMA, implying that the short-term price momentum remains weaker compared to the longer-term trend. This relationship suggests a cautious approach, as continued price weakness may still be in play until a decisive shift is observed.
Support levels for AUD/JPY are anchored at the psychological threshold of 98.00, followed by the nine-day EMA positioned at 97.50. A significant breach below the 97.50 mark could lead to a deeper downturn, potentially approaching the four-month low of 93.59 recorded on September 11. Such a decline would raise concerns about further weakening in the market.
Conversely, on the upside, the currency pair has resistance situated near the vicinity of the 50-day EMA at 98.92. A confirmed break above this level could indicate a strengthening bullish trend, opening the path toward higher targets, including the five-month high of 102.41 reached on November 7. Traders will be closely monitoring these key levels for indications of the next directional move in the AUD/JPY cross.
