AUDJPY has been trading within a range on the short-term time frame, with price oscillating between the support floor around the 112.50 area and resistance near the 114.72 swing high.

The pair is currently testing the range lows, putting bulls on notice as a decisive break below this level could open the door to a more extended selloff.

The support zone around the 112.50 minor psychological mark has been a reliable floor in the past, so a bounce from current levels could attract fresh buying interest and put AUD/JPY back on track toward the range highs near 114.72. A move of that magnitude would represent a sizable recovery from current levels and could gain traction if risk sentiment picks up.

On the other hand, a break and close below the 112.50 support could set off a measured move selloff roughly equal to the height of the range, potentially dragging the pair down toward the 110.00 area or lower.

On the subject of moving averages, the 100 SMA has crossed below the 200 SMA to signal that the path of least resistance is to the downside and that bearish pressure is building. Both moving averages are now sloping lower and converging above price, reinforcing the notion that sellers are in control of the near-term trend.

Stochastic is lingering near the oversold region, with the lines beginning to flatten out and show early signs of a potential turn higher. If the oscillator crosses upward from this area, it could signal that sellers are running out of steam and a bounce is in the works.

RSI is also hovering near oversold territory, so buyers could start returning soon. However, the oscillator still has some room to slide, which means the pair could dip a bit further before a meaningful floor is established.

AUDJPY could take cues from overall market sentiment, as the upcoming US CPI could indirectly affect the commodity currency’s and safe-haven yen’s direction.