• AUDJPY trades at the lowest level since mid-March

• Yen benefits from the BoJ rate hike and currency interventions

• Momentum indicators support the current bearish move

AUDJPY is in freefall, trading at the lowest level since March 15, around 11% below the all-time high of 109.36. This correction is unprecedented and caused by multiple currency interventions from the Japanese authorities and the BoJ announcing its second rate hike in the current tightening cycle. In addition, the Australian Q2 CPI disappointed AUD traders despite failing to produce a significant downside surprise.

In the meantime, the momentum indicators clearly support the bearish move. In more detail, the Average Directional Movement Index (ADX) is edging aggressively higher, confirming the presence of a strong bearish trend in AUDJPY.  Similarly, the RSI has dropped to a 4-year low, highlighting the nature of the current correction. Interestingly, the stochastic oscillator is hovering comfortably inside its oversold territory (OS).

Should the bears remain confident, they could try to push AUDJPY towards the 95.84-96.76 area, which is populated by the January 23, 2007 high and the 78.6% Fibonacci retracement level of the September 13, 2022 – March 24, 2023 downleg. If successful, the door could then be open for a test of the 61.8% Fibonacci retracement level at 93.74 and a new 2024 low.

On the other hand, should the bulls regain market control, they could try to lead AUDJPY above the 98.50 level and then stage a rally towards the busier 99.93-99.97 area. This region is populated by the March 14, 2013 high and the 200-day simple moving average (SMA), and a break above it could be critical for momentum.

To sum up, AUDJPY bears are enjoying the hawkish BoJ and the repeated currency intervention as the bulls are desperately trying to reduce their losses.