The breakout of a bullish pennant opens the door for a retest of yearly highs around 86.25

• AUD / JPY is down for the second day in a row, despite market risk sentiment.
• On Thursday, the AUD / JPY remained subdued, with no clear direction.

The AUD/JPY it falls during the day, down 0.15%, trading at 82.93 during the day at the time of writing. Despite tight liquidity conditions, market sentiment remains bullish as US markets remain closed for Thanksgiving. Major US equity futures indices are up 0.11% to 0.23%, continuing the market sentiment seen in the European session.

On Thursday, during the night session, the AUD / JPY pair remained off, trading in a range, with the SMA of 50, 100 and 200 are within the area of ​​82.90-83.17, which implies that in the short term the AUD / JPY is in range.

That said, the short-term AUD / JPY would be mostly based on pure market sentiment unless the Reserve Bank of Australia (RBA), which has been more dovish than expected, shifts its dovish stance to an aggressive one. That would cause flows to the Australian dollar without taking much market sentiment into account.

AUD / JPY Price Forecast: Technical Outlook

AUD / JPY has a bullish bias, despite the ongoing correction, which has witnessed a test of the 50-day moving average (DMA), which was drilled on Wednesday but recovered by the AUD bulls on Thursday. At press time, the 50 DMA sits at 82.98, a level that the AUD bulls should claim.

The result of a daily close above 83.00 could pave the way for a further rise. The first resistance that AUD / JPY traders would overcome would be the November 19 high at 83.35, followed by the November 16 cycle high at 84.15.

On the other hand, not recovering 83.00 would open the door to the 100 DMA at 81.85, although it would encounter some obstacles on the way down, such as the November 19 low at 82.15.

Technical levels