Featured Trade: Bullish exhaustion seen in AUDJPY ahead of RBA

Short-term technical outlook on AUD/JPY (Mon 01 Jul)



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The Australian central bank, RBA will hold its monetary policy meeting tom, 02 Ju at 0430 GMT. Market participants and the ASX interbank futures market are expecting another cut on its policy cash rate to 1.00%, a fresh record low. Please click here to read our RBA’s preview.

The AUD/JPY cross pair is now displaying an interestingly technical set-up as follow;

  • The recent rebound of 235 pips from its 18 Jun 2019 low of 73.93 has reached a key short-term resistance of 76.35 as defined by the swing high areas of 20 May/10 Jun 2019 and a Fibonacci retracement/expansion cluster.
  • Bullish exhaustion signs have started to emerge at the 76.35 resistance where it has formed an impending bearish daily “Gravestone Doji” candlestick pattern coupled with a bearish divergence seen in the shorter-term 1-hour RSI oscillator at its extreme overbought level.
  • The next significant near-term supports rest at 75.40 and 74.80 (also the minor ascending trendline from 18 Jun 2019 low & 61.8% Fibonacci retracement of the recent rebound from 18 Jun low to 01 Jul 2019 current intraday high).

Key Levels (1 to 3 days)

Intermediate resistance: 75.90

Pivot (key resistance): 76.35

Supports: 75.40 & 74.80

Next resistance: 77.20/50

Conclusion

If the 76.35 key short-term pivotal resistance is not surpassed, the AUD/JPY may see a further potential slide to target the next near-term supports at 75.40 and 74.80 next.

On the flipside, an hourly close above 76.35 invalidates the bearish scenario for an extension of the corrective rebound towards the next resistance at 77.20/50 (former range resistance from 25 Jan/22 Mar 2019 & 50% Fibonacci retracement of the retracement of the recent decline from 17 Apr high to 18 Jun 2019 low).

Charts are from eSignal


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