AUD/JPY - higher lows, dip demand keeps the pair above 38.2% Fib

Thursday’s sharp recovery in the AUD/JPY from the low of 83.52 ensured the rising bottom formation remains intact and the pair above 83.78 (38.2% Fib retracement of 87.49-81.49).

Trades around 84.00 levels

The cross currently trades around 84.00 levels after having tested the Fib support at 83.78 levels.

The bid tone around the Japanese Yen strengthened in the North American session, tracking the decline in the US stocks. At one point, the Dow was down more than 0.5%. However, the index recovered losses to end the day 0.11% lower on the day.

The recovery also helped the AUD/JPY move back above the 38.2% fib retracement. Asian equity indices are not necessarily showing signs of life this Friday morning, but nevertheless have been to avoid losses so far. Consequently, the demand for the Yen remains muted.

AUD/JPY Technical Levels

The pair clocked a low of 82.68 (May 5 low) before rising to 84.34 (May 10 high). Four of the last five daily candles have a long tail, suggesting dip demand. The daily RSI remains above 50.00.

A break above 84.54 (May 2 high) would open up upside towards 85.19 (61.8% Fib retracement) and 85.77 (Mar 31 high). On the downside, support is seen at 83.78 (38.2% Fib retracement) ahead of 83.12 (May 4 low) and 82.68 (May 5 low).