• AUDJPY enjoys fastest weekly growth since June

• Risk skewed to the upside, but gains could be limited

• RBA policy announcement due on Tuesday at 03:30 GMT

 

AUDJPY has turned its eyes back to June’s peak of 97.65 after a constructive week of strong gains.

The RSI and the stochastic oscillator are warning that the latest rapid upturn may not be durable, as the indicators are already testing their overbought levels. Note that the price has been constantly closing above the upper Bollinger band over the past few days. Yet, if it manages to stay above 96.65, the bulls might attempt to crawl up to the 2022 top of 98.50. Even higher, the next stop could be within the constraining zone of 99.25-99.65.

Should the price tumble below 96.65, it may find support somewhere between its simple moving averages (SMAs) and the tentative ascending line at 94.30. The 23.6% Fibonacci retracement of the 84.06-97.65 upleg is within the same region. Hence, a close lower could motivate more selling, likely bringing the 92.85 floor and the 200-day SMA under examination. If that proves fragile too, the pair may slide to 91.85.

In brief, AUDJPY seems to be at risk of a bearish correction, but any downside movements could appear limited if it manages to set a strong footing around 96.65.