AUD/JPY Price Analysis: Bulls regain control but will face a wall of resistance around 93.00

• The AUD/JPY edges high for the second-consecutive day, though it remains trapped in the 91.90-92.60 range.
• A positive market mood could not trigger a strong rally for the Australian dollar, despite the RBA hiking rates by 25-bps.
• AUD/JPY Price Forecast: The outlook remains constructive, though a break above 94.00 would open the door for further gains; otherwise, a test of April’s lows at around 90.43 is on the cards.

The AUD/JPY prints modest gains on Tuesday after the Reserve Bank of Australia pulled the trigger and hiked “surprisingly” interest rates by 25-bps for the first time since November 2010. At 92.34, the AUD/JPY failed to rally sharply, as the next central bank expected to tighten monetary conditions, the Federal Reserve, would unveil its decision on Wednesday.

Investors’ mood remains positive, as shown by US equities advancing ahead of the Fed’s May meeting. The Australian dollar is the strongest currency in the FX complex, while the safe-haven peers, the CHF, JPY, and the greenback, are the laggards.

Factors like China’s coronavirus crisis threaten to derail the global economic recovery. Furthermore, developments around the Ukraine-Russia conflict, like the oil embargo and Russia’s demand for natural gas being paid in roubles, keep energy prices upward pressured, though they seem to weigh less in the market mood.

AUD/JPY Price Forecast: Technical outlook

The AUD/JPY is still upward biased, despite the dip from YTD highs around 95.74, to April 27 daily lows at 90.43. The daily moving averages (DMAs) below the exchange rate confirm the aforementioned. The MACD-line, as shown by its histogram, begins to aim towards the signal-line, meaning that “some” buyers could be adding long positions in the AUD/JPY.

With that said, the AUD/JPY’s first resistance would be the downslope trendline drawn from the YTD tops that pass around the 92.80-93.20 area. A breach of the latter would expose the 94.00 mark, followed by the March 28 daily high at 94.32, and then the 95.00 figure.

On the other hand, if the AUD/JPY breaks below the April 28 daily low at 91.33, that would open the door for a test of April 27 at 90.43, but first, AUD/JPY bears would need to overcome some hurdles on the way down. The following support after 91.33 would be 91.00, followed by April’s 27 low.

Key Technical Levels