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- AUD/JPY continues its gains, reaching fresh highs after 107.00 on Friday.
- Indicators indicate a possible downward correction due to overbought conditions.
The AUD/JPY pair continued its upward trend on Friday, achieving new highs above the 107.00 level, once again surpassing the highs recorded in 2013.
On the daily level, the Relative Strength Index (RSI) for the AUD/JPY pair has risen to 74 from 65 last Thursday. This sharp increase indicates strong bullish momentum but at the same time puts the pair in an overbought position, which could lead to a downside correction. The Moving Average Convergence Divergence (MACD) indicator is showing a continuation of the rising green bars, indicating that the bullish momentum is still strong but there could be a correction on the horizon due to overbought conditions.
AUD/JPY Daily Chart
On a larger scale ProspectsThe AUD/JPY pair is showing continued bullish trends, which is supported by its position above the 20-day, 100-day and 200-day simple moving averages. However, traders should monitor the pair for potential corrections, given the clearer signs of overbought conditions.
If the pair faces a correction that pushes it below the 107.00 level, followed by the 106.00 level, it may find new support lines. Hence, 104.90 level (20-day simple moving average) may act as a potential support line. Meanwhile, buyers will explore uncharted territory if the pair continues its current trend and surpasses the 107.50 level.
