AUD/JPY stages V-shape reversal to eye March high

AUDJPY clears the April high (90.78) as it extends the series of higher highs and lows from last week, and the exchange rate may continue to retrace the decline from the March high (92.25) amid the lack of response to the negative slope in the 50-Day SMA (89.58).

AUD/JPY Rate Outlook

AUD/JPY appears to have reversed ahead of the April low (87.60) as it stages a three-day rally, with the exchange rate largely mirroring the price action in the S&P 500 index as there appears to be a pickup in risk-taking behavior.

The correlation coefficient stands at its most significant reading for 2023 as it climbs to +0.82, and AUD/JPY may continue to reflect a positive relationship with the S&P 500 as they clear the April range.

Need a break/close above 91.70 (38.2% Fibonacci retracement) to raise the scope for a run at the March high (92.25), with the next area of interest coming in around the February high (93.05).

However, lack of momentum to break/close above 91.70 (38.2% Fibonacci retracement) may curb the recent series of higher highs and lows in AUD/JPY, with a move below the 89.60 (50% Fibonacci retracement) to 90.30 (23.6% Fibonacci extension) region bringing the 88.60 (38.2% Fibonacci extension) area back on the radar.

Additional Resources:

AUD/USD defends March low ahead of RBA and FOMC rate decisions

--- Written by David Song, Strategist

DavidJSong