AUD/JPY traded higher today, after hitting support slightly above the 82.10 zone. However, the pair remains below the downside resistance line drawn from the high of Nov. 1, and thus, we would treat the current recovery as a corrective move. The short-term outlook remains cautiously pessimistic in our view.
We believe that the bears may retake charge at some point soon and push the action lower, with a potential dip below 82.10, confirming a forthcoming lower low. The following support to consider may be at around 81.35, a territory that provided resistance on Sept. 28, Oct. 5, and 6, the break of which could pave the way towards the low of Oct. 6, at 80.55.
Shifting attention to our short-term oscillators, we see that the RSI rebounded from near 30 and is now close to its 50 line, while the MACD, although negative, has crossed above its trigger line. Both indicators detect slowing downside speed, which suggests that the rate may continue drifting higher for a while more before the bears retake charge, perhaps until it hits once again the downside resistance line drawn from the high of Nov. 1.
Bullish Case
To start examining the bullish case, we would like to see a break above the 84.50 zones, marked by the inside swing lows of Nov. 2 and 3. This will confirm a forthcoming higher high on the daily chart and may initially pave the way towards the 85.20 territory, marked by the high of Nov. 4.
Another break, above 85.20, could extend the recovery towards the 86.05 barrier, or the 86.23 zone, defined as resistances by the highs of Nov. 1 and Oct. 21, respectively.
