AUD/JPY cheers risk-on action in stocks, is the bottom in place?

• A sharp rise in the US stocks is boding well for the Yen crosses.
• AUD/JPY has created a bullish RSI divergence, signaling a short-term bullish trend reversal. 

The AUD/JPY rose 100 pips on Monday and ran into the 200-hour moving average of 81.88 in the Asian session today, tracking the risk-on action in the US and Asian stocks. 

As of writing, the currency pair is trading at 81.73 and the S&P 500 futures are reporting 0.24 percent gains. The Dow Jones industrial average closed 669 points higher on Monday after Wall Street Journal (WSJ) reported that Chinese and US officials are working to avert a full-blown trade war. The surge in the stock markets also put a bid under the Yen crosses. 

Also, Asian stocks have got off to a positive today. Japan's Nikkei index is up 1 percent or 200 points and South Korea's Kospi has added 15 points or 0.62 percent. Thus, AUD/JPY may cut through the descending hourly 200-Ma resistance. 

RBA Assistant Governor Kent speech due in a few minutes could influence the Aussie dollar. In a larger scheme of things, the pair is at the mercy of the broader market sentiment. 

AUD/JPY Technical Levels

The bullish price-relative strength index (RSI) divergence seen daily chart does indicate a short-term bullish trend reversal. However, only a close above 82.58 (March 21 high) would signal the pair has bottomed out and could yield a rally to 83.00 (psychological figure) and 83.32 (Feb. 14 low). On the other hand, a break below 81.63 (session low) could yield a sell-off to 81.26 (March 19 low), under which a major support is seen at 80.50 (recent low).