AUDJPY recently fell through an ascending trend line support and is currently retesting this area of interest. Applying the Fib tool shows that this is close to the 61.8% Fibonacci retracement level.

It also coincides with the 84.00 major psychological level, which makes it a strong resistance level. To top it off, the 100 SMA dynamic inflection point is also close by.

The 100 SMA is below the 200 SMA to confirm that the path of least resistance is to the downside or that resistance is more likely to hold than to break. If sellers return at this point, AUDJPY could slide back to the swing low at 82.19 or lower.

Stochastic is already indicating overbought conditions or exhaustion among buyers, so turning lower would confirm that sellers are taking over. RSI has a bit more room to climb before reaching the overbought zone, so price might still follow suit.

Economic data from Australia turned out weaker than expected early in the week, as the retail sales report printed a meager 0.1% uptick versus the projected 0.4% gain. However, the pickup in risk-taking has helped lift the Aussie against the lower-yielding yen, erasing its losses from the previous week.

The Fed is downplaying the prospect of tapering and rate hikes, citing that inflation is not the only factor that would determine monetary policy adjustments. This allowed higher-yielding assets to breathe a sigh of relief, as businesses anticipate a longer period of low borrowing costs.

Meanwhile, the yen is also under downside pressure since the BOJ is behind most of its major central bank peers when it comes to shifting its policy stance to a more hawkish one. The upcoming Tokyo Olympics also seems to be weighing on the Japanese currency due to the uncertainty involved, whether or not the games push through.