AUD/JPY Price Analysis: Plunges from YTD high to 84.30s on dismal market mood

  • The Australian dollar remains in a solid-uptrend vs. the yen, but the market sentiment significantly influences the pair.
  • AUD/JPY is upward biased might consolidate in the near term around 84.30-85.25.
  • AUD/JPY would remain bullish above 83.00; otherwise could turn bearish due to the closeness of the 50 and 100-day moving averages (DMAs) near the former.

The AUD/JPY was eyeing a solid beginning of the week, reaching a YTD high at 85.50, but a swing in market mood, which previously was ignored by market participants, spurred a 120-pip plunge from daily highs to the daily low around 84.30. At 84.36, the AUD/JPY reflects the risk-aversion in the financial markets, as negotiations between Russia-Ukraine do not abate the conflict.

Monday’s global equity markets finished in a blood bath, with losses between 0.44% and 3.88%. In the FX space, the greenback is the gainer, followed closely by the JPY, which recovered late in the New York session.

AUD/JPY Price Forecast: Technical outlook

The price action in the AUD/JPY depicts the pair as upward biased, though Monday’s rally stalling at 85.50 illustrates exhaustion in the uptrend, though so far is achieving to record the daily close above previous two-day lows. The Average True Range (ATR) of the cross-currency pair is 97 pips, so that would keep the AUD/JPY in consolidation around the 84.30-85.25 area.

If that scenario plays out, the AUD/JPY first resistance would be Pitchfork’s mid-line between the top and the 50% parallel line, around 85.00. Breach of the latter would expose 85.25, followed by 85.50, and next to the confluence of May 10. 2021, and Pitchfork’s top trendline around 85.80-86.00.

On the flip side, it would turn bearish in the near term if AUD/JPY trades below 83.00.

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