Did you miss this triangle breakout on AUD/JPY? It is possible that the pair is in a rapid decline before gaining momentum during its ascent!
Or is the momentum already fading?
Either way, check out the inflection points I’m seeing on the hourly chart:
AUD/JPY 1 Hour Forex Chart by TradingView
A combination of strong Australian economic data and inaction from Japanese monetary authorities (so far!) has allowed the AUD/JPY pair to rally above the symmetrical triangle pattern recently.
However, some risk aversion sentiment also kept the pair’s gains in check near the R2 level (101.74), forcing the price to retreat to the 38.2% Fibonacci retracement level which appears to be holding as support.
Could a bullish breakout gain strength from here?
Remember that directional biases and volatility conditions in market prices are usually driven by fundamentals. If you haven’t done your homework on the Australian Dollar and Japanese Yen yet, it’s time to check the economic calendar and stay up to date with daily fundamental news!
A surge in bullish pressure could continue to lift the AUD/JPY pair back to the swing high or to new levels at R3 (103.53) while a larger correction could continue to pull the pair lower to retest the previous triangle top near the Fibonacci 61.8%. And 100 SMA dynamic inflection points.
The 100 SMA is above the 200 SMA suggesting that support levels are more likely to hold than break, but a break below these dynamic support areas may still trigger a reversal from the upside.
Don’t forget to keep an eye on this week’s lineup of high-level news events, as well as any headlines that could impact overall market sentiment, when making any trades.