In case you’re AUD bullish but missed the AUD/JPY bullish channel breakout, you should check out this potential pullback opportunity to the former resistance!
Are Aussie bulls just waiting to jump in on this retest?
AUD/JPY 4-hour Forex Chart by TradingView
The Aussie has been on a steady climb for the past weeks, busting through its descending channel resistance to signal a potential reversal from the earlier downtrend.
After all, the Land Down Under’s latest CPI and GDP reports have surprised to the upside, weighing on market expectations for an immediate RBA interest rate cut.
At the same time, rising JGB yields on account of political uncertainty in Japan have dragged the yen lower this week.
Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your homework on the Australian dollar and the Japanese yen, then it’s time to check out the economic calendar and stay updated on daily fundamental news!
AUD/JPY is stalling around the 97.00 levels for the time being, possibly gearing up for a pullback to nearby support levels.
The Fibonacci retracement tool shows that the 38.2% level lines up with the former channel top near the 96.50 minor psychological mark, which could attract more buyers to sustain the climb back up to the swing high near R3 (97.43) or to the next target at R4 (98.02).
A larger correction could still test the 50% Fib that’s in line with the pivot point level (95.91) or the 61.8% level at S1 (95.57), but keep an eye out for a potential continuation of the downtrend should AUD/JPY land back inside the channel.
Whichever bias you end up trading, don’t forget to practice proper risk management and stay aware of top-tier catalysts that could influence overall market sentiment.
Disclaimer:
Please be aware that the technical analysis content provided herein is for informational and educational purposes only. It should not be construed as trading advice or a suggestion of any specific directional bias. Technical analysis is just one aspect of a comprehensive trading strategy. The technical setups discussed are intended to highlight potential areas of interest that other traders may be observing. Ultimately, all trading decisions, risk management strategies, and their resulting outcomes are the sole responsibility of each individual trader. Please trade responsibly.
