- AUD/JPY remains on the back foot after printing a bearish candlestick near multi-day high the previous day.
- Overbought RSI conditions also favor pullback but 84.70-65 appears tough nut to crack for bears.
AUD/JPY justifies Friday’s bearish candlestick while refreshing intraday low to 85.25, down 0.12% on a day ahead of Monday’s European session.
In addition to the Gravestone Doji near the highest levels since November 2021, overbought RSI conditions and an upward sloping trend line from February 10, 2022, also contributes to the bearish bias over the AUD/JPY prices.
However, the pair’s latest downside has limited room before hitting the key short-term support convergence around 84.70-65, comprising the 10-DMA and a 12-day-long rising trend line.
If at all, the quote drops below 84.65, a horizontal area around 83.85-80, comprising multiple levels marked since February 23, will challenge the AUD/JPY bears before directing them to an upward sloping support line from late January, close to 83.05.
On the flip side, recovery moves need to cross the latest peak of 85.89, as well as an upward sloping resistance line from February 10, close to the 86.00 threshold, to recall the buyers.
Even so, highs marked during 2021, surrounding 86.25, will be important to watch for the AUD/JPY buyers.
To sum up, AUD/JPY bulls seem to have tired and may retreat. Even so, the bears have a long road to travel before retaking the controls.
AUD/JPY: Daily chart
Trend: Pullback expected