AUD/JPY traded higher on Thursday, hitting resistance slightly above the 78.77 barrier, which is marked by the high of December 11th. Overall, the pair is forming higher highs and higher lows above an upside support line drawn from the low of November 4th, as well as above all three of our moving averages on our 4-hour chart. Therefore, we would consider the near-term outlook to be positive.
A clear and decisive break above 78.77 would confirm a forthcoming higher high on both the 4-hour and daily chart, and may initially target the 79.45, marked as a resistance by the inside swing low of April 12th, 2019. If that zone is not able to bring an end to the current uptrend, a break higher may set the stage for the 79.90 barrier, marked by the inside swing lows of April 16th and 18th, 2019. The rate could even touch the psychological zone of 80.00.
Turning our gaze to the short-term oscillators, we see that the RSI lies above 50, points up, and looks to be getting closer to the 70 line, while the MACD, already positive, has just poked its nose above its trigger line. Both indicators detect upside speed and support the notion for this exchange rate to continue drifting north for a while more.
On the downside, we would like to see a clear dip below 77.35, before we abandon the bullish case and start examining a bearish reversal. The rate would already be below the aforementioned upside support line and the bears could firstly target the 76.87 level, which is defined as a support by the low of December 7th. If that barrier doesn’t hold, the next support to consider may be the 76.50 zone, which stopped the rate from moving lower between November 25th and 30th. If that zone is also broken, then we may experience extensions towards the 75.80 area, near the low of November 23rd.