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AUD/JPY Bears Look to Challenge the 20-hour Simple Moving Average

May 25, 2021

Talking Points:

  • AUD/JPY pair sees a small gain in early trading in the Asian session.
  • Additional downward movement could be seen if it falls below 84.30.
  • Current momentum could suggest a wait-and-see approach.

The AUD/JPY pair is bouncing up and down in the early trading session in Asia and within a very tight trade range.

At the time of publishing, the AUD/JPY pair is trading around 84.34, up by 0.08% on the day.


AUD/JPY 4-Hour Chart:

On the 4-hour chart, the cross has been teetering around the 84.30 level with the creation of numerous tops, it continues to be a vital trading level. This level also coincides with the 20-hour exponential moving average (EMA).

The descending trend line that started at the high of 85.80 seen on the 11th of May has become an obstacle for the bulls as the price continues to be unable to breach this trendline.

If the price falls below the 20-hour EMA, it will then increase the selling pressure towards the support line at 84.15 and then by Monday’s lows in the region of 83.95.

If the Relative Strength Index (RSI) indicator falls below the 50% area, this could start additional downward pressure for the pair. If the pressure continues and the momentum pushes it further downward, we could see it test the 83.70 support line.

On the flip side, if the pair can maintain trading above the session’s high at 84.36, it might bounce back to the 84.50 resistance line. And if this momentum was sustainable the bulls may be able to break the bearish ascending line and could push on to the 84.80 resistance line. The bulls next target would be the high of 85.14 from the 18th of May.

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