AUD/JPY Price Analysis: The pair bounces off the 77.00 support level as a bullish technical formation appears

• AUD/JPY trades just under flat as volumes are low on Monday.
• The price retested the technical pattern it broke on 27th August.

AUD/JPY 4-hour chart

The Australian dollar has suffered recently against some of its counterparts most notably the US dollar and the Japanese yen. Against the Japanese yen, the price has fallen from 78.46 to 77.37 today. It could have been worst too as the price traded as low as 76.77 but found some support on the red horizontal line in the chart below. 

The Relative Strength Index has produced a bullish signal. The price waves have been making higher lows but the indicator made a lower low wave and even reached the oversold area. This is called a bullish failure swing and can sometimes lead to a trend continuation. 

The MACD is also looking like it could turn to the upside. The histogram bars are diminishing in size and the signal lines are very close to crossing the zero level. The last time both indicators lined up like this was between the 21st and 24th August. The trend then continued and the pair rallied.

This week, there is some data from both nations that could inspire some volatility. Overnight (London Time) the market will get the latest Japanese GDP and Australian business confidence data. Japanese GDP is expected to print at -8.1%, lower than the previous reading of -7.1%. This is a Q2 reading and will reflect the period in which the nation suffered the most due to the COVID-19 pandemic. 

Additional levels