The AUD/JPY is reporting moderate losses at 82.45 despite the positive action in the Asian equity markets. For instance, the Shanghai Composite is up 0.7 percent at press time. Stocks in Australia, Hong Kong, South Korea, and India are also reporting gains. As a result, the AUD and other risk currencies may soon pick up a bid, bolstering the already bullish technical setup in the AUD/JPY cross.
- The path of least resistance is on the higher side, as indicated by the falling channel breakout witnessed on November 12, subsequent higher lows (rising trendline) and ascending 50-period exponential moving average (EMA), 100-hour EMA. The stacking order of the major EMAs is also a classic bullish signal.
- The bullish setup, however, would be invalidated if the pair falls back below the 200-day EMA of 81.99.