AUD/JPY Price Analysis: Bulls keep eyes on 85.50

• AUD/JPY edges higher on Monday following the previous session’s downside momentum.
• The cross-currency pair posts gains after two days of sell-off.
• The momentum oscillator holds onto the overbought zone with receding upside momentum.

AUD/JPY trades higher in the Asian trading hours on Monday morning. The pair retreated after testing the fresh yearly highs on Thursday at 86.25. As of writing, AUD/JPY is trading at 85.03, up 0.35% for the day.

AUD/JPY daily chart

After rising from the lows of 78.85 made one month ago, the pair put its paddle on the accelerator and tested the fresh yearly highs above 86.20 on Thursday. The AUD/JPY bulls look exhausted near the higher levels and pushed lower amid a corrective pullback. 

If the renewed upside in the pair gains momentum, it could touch the 85.50 horizontal resistance level again, followed by the yearly highs of 86.25. Further, a close above the mentioned level would open the gates for the February 2018 highs at 88.12.

Alternatively, if the price reverses direction on further profit booking, it could retrace to the 84.50 horizontal support level.

A decisive break of the ascending trendline at 84.00, which extends from the low of 78.85, would mean more pain for the pair. The AUD/JPY bears would recapture the 83.50 horizontal support zone. The overbought Moving Average Convergence Divergence (MACD) teases bears to test the low of October,12 at 83.01.

AUD/JPY additional levels