AUD/JPY technical analysis: Falling channel, RSI divergence challenge latest recovery

The seven-day long descending trend-channel, 200-HMA act as strong resistances for AUD/JPY.
RSI divergence also adds doubts to the quote’s recent recovery.

Anil Panchal FXStreet

The AUD/JPY pair’s latest recovery is likely to be challenged by short-term falling channel, RSI divergence as it trades near 75.12 during the early Asian session on Tuesday.

While a downward-sloping trend-line from Friday, at 75.13, acts as an immediate upside barrier, pair’s broad moves will be questioned by the descending trend-channel resistance, at 75.22 now.

Increasing the odds of a pullback is divergence on the 14-bar relative strength index (RSI) when observed the lower prices from Friday but comparatively higher RSI levels.

As a result, pair’s U-turn to 75.00 and the latest low near 74.90 can well be expected whereas the channel support around 74.66 could confine following declines.

Alternatively, an upside break of 75.22 resistance can trigger fresh upside towards 200-hour moving average (HMA) level of 75.61.

AUD/JPY hourly chart

Trend: Pullback expected

1. R3 76.03
2. R2 75.81
3. R1 75.46
PP 75.24
1. S1 74.89
2. S2 74.67
3. S3 74.32

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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