AUD/JPY Price Analysis: Short term structure turns bullish on 20-EMA violation

  • Aussie bulls have driven the asset into the highest auction area in a 92.16-94.74 range.
  • An establishment above the 20-EMA indicates that the short-term trend has turned bullish.
  • The emerging risk-on profile adds to the upside filters.

The AUD/JPY pair has sensed fresh demand from the round-level cushion of 92.00 in the Tokyo session. The current momentum in the cross is expected to drive the asset above the immediate hurdle of 92.42 as the risk-on profile is emerging in the market.

On a four-hour scale, the cross has entered into the prior highest auction area, which is considered the recent most traded range. The balanced profile is plotted in a range of 92.16-94.74. Entry of the asset in the highest auction area indicates that the asset is challenging the inventory adjustment phase and a make-or-break move is expected ahead.

The cross has comfortably established above the 20-period Exponential Moving Average (EMA) at 92.00. While the 50-EMA at 92.61 is still far from reach.

Meanwhile, the Relative Strength Index (RSI) (14) has shifted its range into the 40.00-60.00 zone from the bearish range of 20.00-40.00, which indicates that the cross is not bearish anymore.

Going forward, a break above Wednesday’s high at 92.42 will drive the asset towards October 5 low at 92.93, followed by September 30 high at 94.22.

On the flip side, a drop below Wednesday’s low at 91.29 will drag the asset toward the August 2 low at 90.52. If the asset surrenders the 90.52 cushion, yen bulls will further drag the asset toward the psychological support of 90.00.

AUD/JPY four-hour chart

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