AUD/JPY Price Analysis: Bulls persist, pair firmly above 107.00
- AUD/JPY extends its gains, reaching new highs past 107.00 on Friday.
- Indicators hint at possible downward correction due to overbought conditions.
On Friday, the AUD/JPY pair continued its uptrend, achieving new highs beyond 107.00, surpassing yet again its 2013 high levels.
On a daily scale, the Relative Strength Index (RSI) of the AUDJPY has spiked to 74 from 65 last Thursday. This sharp increase signals a strengthening bullish momentum but simultaneously places the pair in an overbought position, which might incite a downward correction. The Moving Average Convergence Divergence (MACD) shows a continuation of the rising green bars, indicating that the bullish momentum remains strong however an adjustment might be on the horizon due to overbought conditions.
AUD/JPY daily chart
On the broader outlook, the AUD/JPY pair demonstrates persistent bullish trends, which is reinforced by its position above the 20-day, 100-day, and 200-day Simple Moving Averages (SMAs). However, traders should monitor the pair for potential corrections, given the more pronounced indicators for overbought conditions.
If the pair encounters a correction driving it below the 107.00 level, followed by the 106.00 level, it may find new support lines. Thus, the 104.90 (20-day SMA) level might serve as a potential support line. Meanwhile, buyers will explore uncharted territory should the pair persist in its current trend and surpass the 107.50 level.
Author
Patricio Martín
FXStreet
Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.
