AUD/JPY technical analysis: 2-week old resistance-line raises doubts on bullish MACD

AUD/JPY remains below short-term trend-line resistance despite bullish MACD.
200-bar SMA can please buyers on the upside break while 70.78/74 becomes immediate key support area.

Anil Panchal FXStreet

Although recovery from multi-year low, coupled with bullish MACD, portrays the strength of buying momentum, failure to cross immediate resistance-line speaks for the sellers as the AUD/JPY pair trades around 71.90 during Tuesday morning in Asia.

The bullish signal of 12-bar moving average convergence and divergence (MACD) increases the odds for the pair’s run-up towards 200-bar simple moving average (SMA) level of 73.57. However, pair’s sustained break of the two-week-old descending trend-line, at 72.12, followed by a rise above 50% Fibonacci retracement level of July-August downpour close to 73.07, becomes necessary to please the buyers.

During the pair’s trading below 72.12 resistance-line, 23.6% Fibonacci retracement level of 71.44 and a horizontal area around 70.78/74, including August 07 low and yesterday’s extreme levels, can act as nearby support.

Should prices keep declining below 70.74, Monday’s low around 70.00 becomes the key to watch as a break of which could extend the declines towards March 2009 high near 69.60 and then to April 2009 bottom surrounding 66.80.

AUD/JPY 4-hour chart

Trend: Bearish

1. R3 72.96
2. R2 72.53
3. R1 71.88
PP 71.45
1. S1 70.8
2. S2 70.37
3. S3 69.71

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

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