The AUD/JPY pair has experienced a sharp decline, falling to around 94.80 and breaking below the 20-day Simple Moving Average (SMA). This represents its lowest point in over two weeks, indicating that sellers are currently in control.

The Relative Strength Index (RSI) is deeply in negative territory, showing that bearish momentum is increasing. Additionally, the Moving Average Convergence Divergence (MACD) histogram is rising with red bars, further signalling downside pressure.

For a shift in market sentiment, the pair needs to recover above the 20-day SMA. The next support level is anticipated around 94.50, while resistance may occur near the 20-day SMA at approximately 96.00.

What we are seeing here is a clear indication that sellers have taken control, pushing prices lower and breaking through a technical level that had previously acted as a foundation. The move below the 20-day Simple Moving Average suggests that downside momentum is picking up pace, and unless buyers step in with conviction, further losses cannot be ruled out. With the current price near 94.80, traders should prepare for possible movement toward the next reference point around 94.50.

Momentum indicators reflect what is happening beneath the surface. The Relative Strength Index has dropped firmly into bearish territory, meaning that downward forces remain strong. The Moving Average Convergence Divergence histogram is also displaying red bars that continue to grow, reinforcing the idea that selling pressure has not eased. These technical signals suggest that those expecting a recovery may need to be patient, as the current conditions are not in their favour.

For sentiment to shift, there must be a recovery above the 20-day SMA. That line, now acting as a barrier near 96.00, is likely to be a point where sellers re-emerge if the price attempts to climb. Until that threshold is cleared, rallies could be short-lived, and traders may need to adjust their expectations accordingly.

If movement toward 94.50 continues, attention should turn to whether buyers emerge at that level or whether weakness persists. If the decline extends below that point, it could open the door to further losses. On the other hand, if support holds firm, a period of price consolidation may follow.

Although short-term traders will need to navigate the ongoing decline, any attempt at recovery must be viewed alongside overall momentum. As long as downward forces dominate, sellers will stay in control, and breakouts toward higher levels could struggle to gain lasting traction.