AUD/JPY changes back to a bearish undertone for a test of 200-DMA at 81.00 – DBS Bank

AUD/JPY’s 43.3% rally from March 2020’s 59.90 appears to have lost its sparkle, and likely to have paused or ended at 85.80. A bearish candlestick pattern on the monthly chart, and prices treading under the daily Ichimoku cloud are signs of a subtle yet slow shift to a bearish undertone. An accelerating sustained decline under 80.92 would be affirmative of this, according to Benjamin Wong, Strategist at DBS Bank.

Losing upside pace

“AUD/JPY has traded to a respectable 85.80 peak and has started to roll back, in which further declines eye an imminent test of the key 200-day moving average (DMA) at 81.00.”

“After 15 months of unbridled strength, AUD/JPY has started to dip under the Ichimoku cloud; thus displaying subtle signs of weakness. At current levels, there is staggered resistance posted up at the 84.26-84.80 stretch. Resistance is kicking in at the Tenkan-Kijun price levels of 82.75 and 83.18, respectively.”

“Since fetching a 85.80 high, AUD/JPY is exhibiting receding momentum. But for the cross to pick up downside speed and accelerate lower, naturally a terse break of 200-DMA of 81.00 and 80.92, the breakout zone in late January, has to be a precondition.”