AUD/JPY has come under sharp selling pressure following the pullback on the 82.50 resistance level in the preceding week. Moreover, despite that, the 20- and 40-simple moving averages (SMA) posted a bullish crossover, the price slipped below them and continues the negative movement. Looking at daily oscillators though, there are signs that the latest pullback may continue for a while longer. The RSI turned downwards after it hit resistance near its 70 line, while the MACD is moving below the trigger line.
A further aggressive sell-off could drive the price until the 78.70 support level, reached on September 7, and if this level is breached, it may set the stage for more declines. A clear break below this level could challenge the 76.72 level, taken from the low on November 2016.
On the flip side, a possible jump above the SMA could meet the area near the 23.6% Fibonacci retracement level of the down-leg from 90.30 to 78.70, around 81.42. A move higher from this level could send prices until the 82.50 level before being able to hit the 38.2% Fibonacci of 83.12.
Regarding the medium-term picture, the bearish sentiment deteriorated after the downfall from the 90.30 resistance level and fell towards the almost two-year low of 78.70.
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