AUD/JPY Price Analysis: Bulls took charge around 84.50, rallied near 2021’s highs around 85.80

• AUD/JPY: The prevailing trend still tilted to the upside on the back of the interest rate differentials.
• AUD/JPY: Monday’s doji was a pause for bulls, as witnessed by a 100 pip jump on Tuesday,  which printed a fresh five-month high.
• AUD/JPY: An upside break opens the door to 2018 highs around 89.00.

The AUD/JPY edges low as the Asian session kicks in, barely down 0.01%, trading at 85.46 at the time of writing. Positive market sentiment through the New York session found some follow through as Asian equity futures rise between 0.67% and 2.17%. Solid US third-quarter corporate earnings spurred risk-on mood in the market, as energy prices stabilized around familiar levels, like US crude oil benchmark WTI, which sits around $82.36 per barrel.

AUD/JPY Price Forecast: Technical outlook

Back to the AUD/JPY cross-currency pair, it is trading at five-month highs. At press time, the daily chart depicts the cross-currency is approaching the May 10 high, at 85.80, a strong resistance level. In the case of an upward break above the latter, December 5, 2017, high at 86.84 would be the first resistance level. A breach of the abovementioned could expose crucial supply zones towards 89.00, but it would find some hurdles on the way, like January 10, 2018, low at 87.20, followed by January 31, 2018, high at 88.49.

On the flip side, failure at 85.80 could send the AUD/JPY sliding lower. A daily close below the 84.27 level could trigger a downward move towards the before resistance-now support area around 83.80. A breach of the latter would expose the 200-day moving average (DMA) at 82.47.

The Relative Strength Index (RSI), a momentum indicator, is at 81, in overbought levels, indicating that the AUD/JPY might consolidate before resuming the upward move, confirmed by the daily moving averages (DMA’s), which are located well below the spot price.