- Daily chart indicators suggest a downward trend; the decline in RSI is marking a downward momentum
- Signs of bullish exhaustion after the recent gains have strengthened the consolidation outlook.
- The pair currently targets support around the 103.70 area, which aligns with the 20-day SMA.
In Monday's trading session, the AUD/JPY pair slipped to the 104.35 region due to the resumption of a downward momentum. The pair's upward trajectory appears increasingly exhausted, and a consolidation phase seems more probable moving forward.
As per the daily chart, the RSI has descended to 59 from the previous session's reading of 65, suggesting a continued downward momentum. Along with this, the MACD prints rising red bars, indicating an increase in the selling traction
AUD/JPY daily chart
The 20-day SMA has now established a sturdy support base around the 103.70 region, which could potentially halt the ongoing losses. Any breakthrough below the 20-day SMA could prompt a short-term bearish atmosphere.
In the case of a further decline, the 100 and 200-day SMA might act as barriers to cushion losses. On the other hand, the bulls might face resistance in trying to push the pair back above the 105.00 mark. If the pair fails to break through these integral points, traders might witness the pair entering into a consolidation phase.
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