This Aussie pair has been cruising higher but is still stuck in a bit of a holding pattern on the 4-hour time frame.
Is it due for more consolidation or a breakout soon?
Check out these potential support levels right here!
AUD/JPY 4-hour Forex Chart by TradingView
Thanks to improving risk sentiment and strengthening hawkish RBA expectations, AUD/JPY has been forming higher lows and slightly higher highs for nearly a couple of months already.
Price hit a ceiling at the top of this rising wedge pattern, possibly gearing up for a pullback to nearby support areas.
Are buyers ready to hop in at these Fib retracement levels?
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!
The 38.2% correction level is right around the pivot point (100.85) and appears to be holding as a floor, potentially sending AUD/JPY back up to the swing high or the wedge resistance near R1 (101.97).
A larger correction could still test the 50% Fib at 100.32 or the 61.8% level closer to the wedge bottom and S1 (99.87), which might be the line in the sand for a bullish pullback.
Look out for reversal candlesticks at the support levels to suggest that a continuation of the climb is in order or for long red candles closing below the bottom of the wedge to signal that a breakdown is taking place.
If the latter happens, AUD/JPY could set its sights on bearish targets at S2 (98.75) then S3 next (97.78).
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.
