AUD/JPY Price Analysis: Bulls lift prices but face solid resistance around 91.00

• The Australian dollar rose vs. the yen, despite a risk-aversion environment.
• On Tuesday, Asian equity futures point to a higher open, boosting the prospects of risk-sensitive currencies.
• AUD/JPY Price Forecast: Monday’s candlestick left a large bottom wick, meaning that bulls lifted prices but remain downward pressured unless a daily close above 91.00 is achieved.

The AUD/JPY marches firmly for the second consecutive day but remained below the April 27 swing low of 90.43, amidst a downbeat market mood that faltered to push AUD/JPY prices lower, despite JPY strength. At 90.02, the AUD/JPY is above the 90.00 mark, and the pair is trapped between the 50 and 100-day moving averages (DMAs) at 91.05 and 86.89, respectively.

Sentiment-wise, Asian equity futures point to a higher open, contrarily to New York’s mood, despite investors’ concerns about the Federal Reserve’s pace of tightening monetary policy and China’s economic slowdown, as Industrial Production and Retail Sales shrank, reflecting the impact of covid-19 zero-tolerance restrictions.

During the overnight session, the AUD/JPY opened at around 89.50, daily highs, followed by a dip towards 88.50, as risk-aversion took its toll on risk-sensitive currencies like the AUD, the NZD, and the CAD. However, late in the overlap of the European/North American session, sentiment improved, and boosted the prospects of the Australian dollar, as the Japanese yen, finished as the laggard in the FX space.

AUD/JPY Price Forecast: Technical outlook

The AUD/JPY is neutral-upward biased once the cross-currency pair broke below the 50-DMA to the downside. Now that the pair sits nearby the 100-DMA, that could open the door for further upside price action, as witnessed by Monday’s candlestick, with a large bottom-wick, meaning that AUD/JPY bulls leaned ahead of the 100-DMA around 88.29 and pushed prices higher.

That said, the AUD/JPY’s first resistance would be the 90.00 barrier. Once cleared, the following resistance would be September 2017 daily high at 90.30, followed by the 50-DMA at 91.05. On the flip side, the AUD/JPY first support would be 89.00. Break below would expose the 88.00 mark, followed by the May 12 daily low at 87.30.

Key Technical Levels