- AUD/JPY refreshes intraday high, prints two-day rebound from 15-week low.
- RBA keeps monetary policy unchanged, cites limited risk from Omicron.
- Convergence of previous support line, 61.8% Fibo. challenges recovery moves.
- Horizontal area from September holds the key to yearly bottom.
AUD/JPY extends Friday bounce off the lowest levels since late August after the Reserve Bank of Australia’s (RBA) monetary policy meeting on early Tuesday. That said, the cross-currency pair refreshes day’s top around 80.25 by the press time.
The RBA matches market expectations while keeping the benchmark rate unchanged at 0.1% and the weekly bond purchases of $4.0 billion intact until at least mid-February 2022. However, the Australian central bank’s comments favored AUD/JPY bulls. “The omicron strain is a new source of uncertainty, but it is not expected to derail the recovery,” said the latest RBA statement.
In addition to the RBA’s cautious optimism, the RSI rebound from oversold territory and the AUD/JPY pair’s ability to recover from a short-term horizontal area favors buyers.
At the latest, a confluence of the 61.8% Fibonacci retracement (Fibo.) of August-October upside and previous support line from August, around 81.05-10, seems to lure the AUD/JPY buyers.
Should the quote manages to rise past 81.10, the 100-DMA level of 81.78 will act as an additional check for the upside moves.
Alternatively, the resistance-turned-support from November 26, near 79.60, may test the AUD/JPY sellers ahead of the stated horizontal area near 78.85-80.
During the pair’s weakness past-78.80, the yearly low of 77.89 will be in focus.
AUD/JPY: Daily chart
Trend: Further recovery expected