AUD/JPY Price Analysis: A pullback towards 93.00 seems a bargain sell

• A vertical downside move is expected to be followed by a pullback move.
• Declining 20-and 50-EMAs signal more weakness ahead.
• The RSI (14) has shifted into a bearish range of 20.00-40.00, which adds to the downside filters.

The AUD/JPY pair has attempted a rebound after printing a low of 92.29 in the Asian session. Earlier, the asset delivered a downside break of the inventory distribution formed in a range of 92.86-93.37 on Friday. This resulted in a steep fall for the asset. On a broader note, a successful re-test of the July 20 high at 95.67 on Tuesday resulted in a nosedive move in the asset.

Usually, a steep fall in an asset is followed by a pullback move as investors liquidate their shorts due to profit booking and some investors prefer to enter again at a pullback and capitalize on the move as a bargain sell. On the hourly scale, the potential horizontal support is plotted from July 12 low at 91.96.

The 20-and 50-period Exponential Moving Averages (EMAS) at 93.06 and 93.56 respectively are scaling downside vigorously, which adds to the downside filters.

Also, the Relative Strength Index (RSI) (14) has shifted into the bearish range of 20.00-40.00, which indicates more pain ahead.

A pullback move towards the 20-EMA at 93.06 will be a bargain sell for the market participants, which will drag the asset towards Monday’s low and the potential support at 92.29 and 91.96 respectively.

Alternatively, the aussie bulls would regain some strength if the asset oversteps the 50-EMA confidently at 93.56. This will send the asset towards July 25 low at 93.90, followed by July 26 low at 94.57.

AUD/JPY hourly chart