AUD/JPY Price Analysis: Holds to gains post RBA as technicals support further upside
- AUD/JPY sees a sharp rally, buoyed by RBA’s surprise rate hike to 4.10%; the pair trades flat above 93.00.
- The technical analysis projects a bullish bias, with key resistance at the December 19 high of 93.35.
- Risk aversion could trigger pullback, with initial support found at the May 19 high of 92.35.
AUD/JPY rallied sharply on Tuesday after the Reserve Bank of Australia (RBA) surprisingly raised rates by 25 bps, lifting the cash rate to 4.10%. Therefore, the AUD/JPY jumped from 92.30, toward 93.14, before retracing some of those gains, but buyers moving in, lifted the AUD/JPY toward the current spot price. At the time of writing, the AUD/JPY is trading at 93.14, flat as the Asian session begins.
AUD/JPY Price Analysis: Technical outlook
After rallying sharply, the AUD/JPY remains upward biased, as it sits above the Ichimoku Cloud and the Chikou Span. Additionally, the Tenkan-Sen line is above the Kijun-Sen line, each at 91.76 and 91.21, respectively, another bullish signal. Nevertheless, the nature of the cross-currency pair indicates that its subject-to-market sentiment swings, which could shift the pair’s direction.
The Relative Strength Index (RSI) indicator and the 3-day Rate of Change (RoC) further cement the bias, as the RSI sits in bullish territory, while the RoC indicates buyers remain in charge.
Therefore, the AUD/JPY first resistance would be the December 19 high at 93.35. A breach of the latter will expose a top-trendline of an ascending channel at around 93.70/85 before challenging the 94.00 figure.
In the event of risk aversion, the AUD/JPY pair may be subject to a pullback, and the first support would be the May 19 high at 92.35 before diving to the 92.00 figure. Once cleared, the next support would be the Tenkan-Sen line at 91.76, ahead of sliding toward the Kijun-Sen line at 91.21.
AUD/JPY Price Action – Daily chart
Author
Christian Borjon Valencia
FXStreet
Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.
