- AUD / JPY bounces off 100-SMA, weekly confluence of the ascending trendline.
- MACD bearish, weakness below two week horizontal resistance keeps sellers hopeful.
- The RBA is generally expected to keep monetary policy unchanged, instant lockdown talks, July moves observed.
AUD / JPY extends Monday’s rally moves to 84.75 midway through the initial Asian trading session on Tuesday. In doing so, the cross currency pair maintains a corrective 100-SMA pullback and a week’s support line ahead of the Reserve Bank of Australia’s (RBA) key monetary policy decision.
AUD / JPY sellers remain bullish amid the recent low-high formation and bearish MACD, coupled with sustained trading below short-term horizontal resistance. However, a clear break down to 84.70 becomes necessary for them to take entries.
Thereafter, the 200-SMA level of 84.48 may offer an intermediate stop before sliding the quote towards the 84.00 level and then down to the monthly low around 83.90.
Meanwhile, another rally needs to break through the 85.00 round number to convince buyers to attack a horizontal area surrounding 85.15-20.
It should be noted, however, that a successful rally beyond 85.20 allows AUD / JPY to probe the May peak of 85.80.
Read: Reserve Bank of Australia preview: No fireworks as focus is on July meeting
Four hour chart AUD / JPY
Trend: new weakness expected