- A symmetrical triangle formation after a juggernaut rally hints continuation of an upside.
- Overlapping 50-EMA and asset’s price indicates short-term consolidation ahead.
- Aussie bulls will recapture a seven-year high at 96.88 on triangle breakout.
The AUD/JPY pair has picked bids around 94.20 after a soft decline from 94.37 in the early Asian session. Broadly, the cross has turned sideways in a 93.97-94.42 range after a vertical upside move on Monday. Aussie bulls have not exhausted yet and are expected to extend their gains further.
On a daily chart, the asset is oscillating in a Symmetrical Triangle chart pattern that signals an extreme slippage in the standard deviation. The upward-sloping trendline of the above-mentioned chart pattern is placed from May 12 low at 87.31 while the downward-sloping trendline is plotted from June 8 high at 96.88.
The 50-period Exponential Moving Average (EMA) at 93.35 is overlapping with the asset prices, which signals a consolidation ahead.
Meanwhile, the Relative Strength Index (RSI) (14) is oscillating in the 40.00-60.00 range. The prolonged upside bias is hinting for the continuation of an upside after a symmetrical breakout. And, a break above 60.00 will trigger the upside momentum.
Should the asset oversteps July 27 high at 95.70, the aussie bulls will drive the risk barometer towards a seven-year high at 96.88. A breach of the latter will send the cross towards May 2015 high at 97.30.
On the flip side, a decisive drop below Friday’s low at 92.24 will drag the asset towards Wednesday’s low at 91.72, followed by August low at 90.52.
AUD/JPY daily chart