AUD/JPY is back above weekly 100-MA

The overnight recovery in the AUD/JPY cross is being extended this Tuesday morning in Asia, with the pair trading above the weekly 100-MA level of 84.48.

Chart driven recovery

The recovery from 83.90 to 84.55 appears largely due to the oversold nature of the RSI indicator on the 1-hour and 4-hour time frame. However, on a larger time frame - daily chart, the RSI is still sloping downwards and yet to hit the oversold territory.

Moreover, despite the recovery in the AUD/JPY (a risk barometer), the S&P 500 futures are trading dead flat, suggesting the pair is witnessing a chart driven recovery. The stock markets across Europe and in the US could be in for a technical correction/sideways action, although it remains to be seen if the pair continues its technical recovery on reverses course as the day progresses.

AUD/JPY Technical Levels

A break above 84.75 (2.63% of 87.485-83.899) would expose 85.00 (zero figure) and 85.20 (Jan 31 low). On the other hand, a breakdown of support at 84.188 (session low) could yield a pullback to 83.899 (previous day’s low) and  83.744 (Dec 29 low).