• AUD/JPY has been trapped within the 85.00-86.00 range in the last three days.
• AUD/JPY: Long-wicks on both sides of a doji depicts indecision between buyers/sellers.
• AUD/JPY: RSI at overbought levels could spur a correction towards 84.61 before resuming the uptrend.

The AUD/JPY hovers around familiar levels, unable to break in either direction, is trading at 85.57 during the day at the time of writing.

On Thursday, the market sentiment was upbeat, as portrayed by US stocks finishing in the green. Further, as the Asian session begins, investor mood turns sour, depicted by Asian equity futures dropping, except for the Japanese Topix and the Australian S&P/ASX 200.

AUD/JPY Price Forecast: Technical outlook

Daily chart

The daily chart portrays the cross-currency has an upward bias, depicted by the daily moving averages (DMA’s) remaining below the spot price with an upslope confirming the solid uptrend. 

The pair has been unable to break to the upside, despite three previous attempts amid having a risk-on market sentiment, which usually benefits the risk-sensitive Australian dollar.

Furthermore, Wednesday’s price action formed a doji, with long wicks on both sides, confirming indecision between buyers/sellers.

Furthermore, the Relative Strength Index (RSI) is at 72 in overbought levels, indicating the AUD/JPY pair may retreat, allowing the RSI indicator to exit from the abovementioned conditions before resuming the uptrend.

Therefore, in case of a lower correction, the first meaningful support level would be the October 22 low at 84.61