AUDJPY failed in its past two attempts to break above the 76.00 major psychological mark and found support at 75.00, creating a double top on its 1-hour chart.

Price has yet to break below the neckline to confirm that a drop of the same height as the chart formation is in order. If support keeps holding, another rally to the tops could follow.

The 100 SMA is above the 200 SMA to suggest that the path of least resistance is to the upside or that support is more likely to hold than to break. The gap between the indicators is still wide so there’s no imminent bearish crossover yet.

Also, stochastic has been indicating oversold conditions for quite some time, and the oscillator is starting to turn higher to reflect a return in bullish pressure. RSI also pulled out of the oversold region to indicate that buyers are taking over while exhausted sellers take a break.

The Aussie has been on weak footing this week as the RBA kept rates on hold as expected but hinted at a possible cut in their next meeting. The official statement indicated:

“The Board continues to consider how additional monetary easing could support jobs as the economy opens up further.” and that “The Board views addressing the high rate of unemployment as an important national priority.”

Risk-off flows also seem to be returning, favoring lower-yielding currencies like the yen over higher-yielding ones like commodity currencies. The focus on the resurgence in COVID-19 cases worldwide appears to be keeping businesses wary of another set of lockdown measures that could severely limit consumer activity.

The FOMC minutes are up for release later in the week and could provide more catalysts for market sentiment changes, with the possibility of more stimulus likely lifting riskier assets.