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AUD/JPY trades around the 93.80 level as it experiences declines, remaining within the lower part of its daily range. Despite a positive MACD reading, bearish signals prevail due to negative momentum indicators and moving averages.
Technical analysis shows immediate support at 93.78 and adds potential downside targets at 93.05. Resistance levels are identified at 93.92, 94.05, and 94.26, indicating that a reclaim above these zones is necessary to alter the current downward trajectory.
Moving Averages Reinforce Bearish Sentiment
All key moving averages demonstrate downward trends, reinforcing the bearish outlook for the pair. The 20-day SMA is at 94.05, while the 100-day and 200-day SMAs sit at 96.76 and 98.63, respectively.
Building off the existing view, spot price action in AUD/JPY continues to dwell near the lower edge of its established range, giving us more weight to the idea of sustained pressure playing out. Although the MACD technically registers in positive territory, this is less relevant when other indicators paint a different story. Momentum metrics and key longer-term moving averages remain slanted to the downside, and since price sits firmly beneath those reference points, the trend bias holds firm for now.
The immediate support area of 93.78 has already been flirted with, but not yet convincingly broken. If that gives way cleanly, we would naturally focus next on 93.05, which lies not too far overhead of prior structural demand that showed up mid-May. Failure to attract responsive buying interest anywhere in that region would raise the probability of further compression, especially in a market still lacking any broad catalyst for recovery.
On the flip side, price has bumped several times into a shelf around 93.92 and rejected upwards moves with limited conviction. Beyond that, 94.05 aligns directly with the 20-day SMA, and this makes it more than just another nearby resistance — it also marks the shorter-term sentiment gauge. For any kind of base-building to be taken seriously, a move through that level followed by sustained consolidation above it would need to occur. Even then, extension through to 94.26 would be required before it would make sense to revisit directional bias more favourably.
Broader Market Context And Option Sentiment
From a broader perspective, the distance between current price and the 100- and 200-day SMAs (96.76 and 98.63) further reflects the degree of the prevailing downtrend. These moving averages have not only been declining but also increasingly diverging, which in our experience implies an undercurrent of persistent selling from higher time frame participants.
Rates markets and derivative pricing will naturally respond to these levels by adjusting forward-looking expectations. When we see these technical patterns align with option implied volatility rises and tighter range compression, it often means traders are positioning for further test lower — but not necessarily betting aggressively just yet. Instead, we’d view this phase as one for passive positioning and tighter stop placement, especially for those who already sit short. Waiting for confirmation from broader risk sentiment and cross-currency movements, such as USD/JPY and AUD/USD, may provide further inter-market validation.
Short-dated options are likely to remain sensitive as long as the pair stays below the 94 handle, while longer expiries may begin to price in lower strikes closer to the 93.00 figure, especially if current pressure keeps grinding below the daily open. Spot traders who’ve already benefited from the slide might start to trim into any minor rebounds near established resistance, while option sellers will favour building around topside wings where volatility risk feels mispriced.
Expectations need to be anchored in context — and for now, that context suggests the pair remains vulnerable to further deterioration. Any renewed buying interest needs to clear both moving averages and psychological thresholds before we’d consider changing course.
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