- AUD/JPY wavers around December 2018 top, marked the previous day.
- Overbought RSI, candlestick suggesting trend reversal suggest the pullback moves.
- Bulls need to cross 82.20 for conviction, sellers can eye previous resistance line from February 08.
- Catalysts concerning the QE extension will be watched in RBA minutes.
AUD/JPY takes rounds to 82.00, currently declining to 81.95, during the initial Asian session on Tuesday. In doing so, the quote justifies the bearish Doji candlestick formation at the highest in 26 months.
Also favoring the odds of the pullback could be the overbought RSI conditions and cautious sentiment ahead of the Reserve Bank of Australia (RBA) meeting minutes. The Aussie central bank matched the wide market forecast by not altering the interest rate during its recent meeting. However, an extension to the Quantitative Easing (QE) teases the sellers.
As a result, pessimism statements from the minutes could drag the AUD/JPY prices to the one-week-old previous resistance, at 81.50 now.
In a case where the cross fails to bounces off 81.50, the monthly support line and the 200-bar SMA offer extra filters to the south.
Meanwhile, fresh buying will wait for a clear break above the December 2018 peak of 82.20, which in turn will lead the AUD/JPY bulls toward the September 2018 high near 82.50.
It should, however, be noted that the pair’s ability to stay positive beyond 82.50 enables the AUD/JPY buyers to aim for the late 2018 top surrounding the 84.00 round-figure.
AUD/JPY four-hour chart
Trend: Pullback expected
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