AUD/JPY Price Analysis: To face further downside on hawkish remarks, risk-off mood

• AUD/JPY is on a downward trajectory as a global risk-off mood sets in, influenced by hawkish central banks.
• Technical indicators suggest a pullback from the early June rally, with immediate support at a June 19 low of 96.73.
• The path of least resistance is downwards, despite YTD high resistance at 97.67.

As the Asian session begins, the AUD/JPY is poised to extend its losses past Monday’s close of 97.26 amidst a risk-off impulse. Expectations of further tightening by global central banks, and hawkish Fed dot plots, weighed on investors’ mood. At the time of writing, the AUD/JPY is trading at 97.20, down by 0.06%.

AUD/JPY Price Analysis: Technical outlook

Following a steep rally in early June that totaled an 8% gain, the AUD/JPY could be set for a pullback as oscillators entered the overbought territory, with the Relative Strength Index (RSI) indicator hitting 80. Since then, the RSI started to trend lower, while the AUD/JPY retreated from year-to-date (YTD) highs of 97.67.

If AUD/JPY slides below the June 19 low of 96.73, the next support would be the June 16 low of 96.24. A breach of the latter will expose the 96.00 figure, followed by the Tenkan-Sen at 95.32. Conversely, AUG/JPY’s first resistance would be the YTD high at 97.67. Break above will expose the 98.00 figure

AUD/JPY Price Action – Daily chart