AUD/JPY Price Analysis: Bulls maintain a positive stride, potential shift remains possible

• Daily chart indicators depict a steady buying traction with RSI deep in positive area , but nearing overbought conditions.
• On the hourly chart indicators are beginning to flatten, which suggests the cross may face some losses ahead of the Asian session.
• Given the heightened momentum, the stage could be set for a shift in market dominance, suggesting a potential correction on the horizon.

In Monday's session, the AUD/JPY pair managed to acquire supplementary momentum and saw some gains. Despite the strength of the buying momentum, the market may be heading for a correction since the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) hint at overbought levels. Ahead of the Asian session, with the pair nearing cyclical peaks, an incoming pullback for the cross may be on the horizon.

Examining the daily chart, the RSI is near the overbought territory. A gradual decrease from overbought conditions is evident while maintaining a positive trend, indicating buyers' dominance but hinting at a potential flattening. In line with that, the MACD shows a negative momentum as red bars are seen.

AUD/JPY daily chart

The hourly RSI values reveal a similar positive trend, with values hovering around the 60 mark but pointing downwards. This is backed by the MACD which prints decreasing green bars.

AUD/JPY hourly chart

In the broader context, the AUD/JPY is trading above all three key Simple Moving Average (SMA) benchmarks of 20, 100, and 200 days and this alignment suggests a strong bullish outlook for the pair. However, as the pair remains near cycle highs and due to the cross momentum becoming overextended, a correction could be imminent.