The Australian dollar has an edge over the Japanese yen

AUD/JPY returned to the June peak of 97.65 after a constructive week of strong gains. The RSI and Stochastic Oscillator warn that the recent rapid rise may not be permanent as the indicators are already testing their overbought levels. The price has been consistently closing above the upper Bollinger band in recent days. Still, if it manages to hold above the 96.65 level, the bulls could try to creep up to the 2022 high of 98.50. Even higher, the next stop could be in the restrictive zone of 99.25-99.65. If the price breaks below 96.65, it could find support somewhere between the simple moving averages (SMA) and the tentative uptrend line at 94.30. Hence, a close lower could encourage further selling, which would likely lead to an examination of the lower boundary of 92.85 and the 200-day SMA. If that too turns out to be fragile, the pair could drop to 91.85. AUD/JPY appears to be in danger of a bearish correction, but any downside move could appear limited if it manages to settle firmly around 96.65.

Article author: Instaforex team

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