AUD/JPY Technical – Recent two weeks of rebound at risk of bearish reversal

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<li><strong>+297 pips of rebound seen in AUD/JPY from 3 October 2023 low of 93.06 has reached a key short-term resistance zone of 95.70/96.00.</strong></li>
<li><strong>The up move from 10 October to 12 October 2023 has been accompanied by a weakening of upside momentum as indicated by the hourly RSI.</strong></li>
<li><strong>Watch the near-term support at 95.30 (20-day moving average) as a potential downside trigger level.</strong></li>
</ul>
<p>This is a follow-up analysis of our prior report, “<em>Bearish reaction from key long-term range resistance in place since Oct 2007” </em>published on 3 October 2023. Click <a href="https://marketpulse.com/forex/aud-jpy-technical-bearish-reaction-from-key-long-term-range-resistance-in-place-since-oct-2007/kwong">here</a> for a recap.</p>
<p>The price actions of the <a href="https://www.oanda.com/sg-en/trading/forex/">AUD/JPY</a> cross-pair have shaped the expected slide and hit the 93.70 support as it printed an intraday low of 93.06 on 3 October 2023 in light of the unconfirmed Bank of Japan (BoJ) intervention in the foreign exchange market as instructed by Japan’s Ministry of Finance to negate the persistent multi-month JPY weakness in place since the start of 2023.</p>
<h2><strong>The recent bullish tone has started to lose upside momentum</strong></h2>
<p><a href="https://www.marketpulse.com/wp-content/uploads/2023/10/AUDJPY_2023-10-12_18-24-39.png"><img loading="lazy" class="alignnone wp-image-808095 size-large" src="https://www.marketpulse.com/wp-content/uploads/2023/10/AUDJPY_2023-10-12_18-24-39-1024×574.png" alt="" width="700" height="392" srcset="https://www.marketpulse.com/wp-content/uploads/2023/10/AUDJPY_2023-10-12_18-24-39-1024×574.png 1024w, https://www.marketpulse.com/wp-content/uploads/2023/10/AUDJPY_2023-10-12_18-24-39-300×168.png 300w, https://www.marketpulse.com/wp-content/uploads/2023/10/AUDJPY_2023-10-12_18-24-39-768×430.png 768w, https://www.marketpulse.com/wp-content/uploads/2023/10/AUDJPY_2023-10-12_18-24-39.png 1514w" sizes="(max-width: 700px) 100vw, 700px" /></a></p>
<p>Fig 1: AUD/JPY minor short-term trend as of 12 Oct 2023 (Source: TradingView, click to enlarge chart)</p>
<p>In the past two weeks, the AUD/JPY has rallied by +276 pips from its 3 October low to its recent 12 October high of 95.83 but its upside momentum has started to abate at the key short-term resistance zone of 95.70/96.00.</p>
<p>The current price actions have almost retested the former minor ascending support from the 8 September 2023 low and have traded in a tight range of 26 pips since the start of today, 12 October Asian session.</p>
<p>In addition, the hourly RSI indicator, a gauge of momentum has flashed a bearish divergence condition at its overbought region which highlights the lack of upside momentum follow-through since 10 October 2023. These observations suggest an increased risk of a short-term bearish reversal in AUD/JPY at this juncture.</p>
<p>Watch the 96.00 key short-term pivotal resistance (also the minor congestion area of 29 September/2 October 2023 &#038; the 76.4% Fibonacci retracement of the recent slide from 29 September 2023 high to 3 October 2023 low) and a break below the near-term support of 95.30 (also the 20-day moving average) reinforces the bearish reversal scenario towards the next intermediate support at 94.60 in the first step.</p>
<p>However, a clearance above 96.00 invalidates the bearish reversal scenario for a squeeze up to a retest on the long-term secular resistance of 96.60/96.88.</p>