AUDJPY has seen a bullish ascendency which has propelled the currency pair to multi-month highs. By remaining above the 61.8% area of the 78.45/73.12 downside Fibonacci leg suggests that the bias remains on the upside.
Prices are now trading far away from the Ichimoku cloud, whilst the conversion and baselines remain out of focus. Should prices remain clear of the specified regions, the next test will be the 78.6%.
However, as the recent regular bullish divergence pushed prices higher, the small bearish divergence hinted on the momentum indicator could witness exhaustion. As we have witnessed support at the 61.8%, bears will be eager to test this area once again, for possible weakness at 50%.
A look at a short-term perspective shows a strong bearish divergence that could see resistance at the recent double top.
This could then bring the conversion level of the Ichimoku indicator into play, to test the $76 area. The fact that prices are trading away from the cloud will provide some comfort to bulls in the market.
The next target will be if the pair can hang on to the $77 zone as we look for further divergences for upside advancement.
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