This forex pair recently fell through the bottom of the triangle and is now in the middle of a correction.
Can the AUD/JPY bounce off this resistance area?
Two days ago, we were looking at this Possible triangle breakout on AUD/JPYAnd it seems that the sellers came out on top.
If you miss this big move and are still in a downtrend for the Australian dollar, you might have an opportunity to jump in a better price around these levels.
AUD/JPY for one hour Planned by TV
The application of the Fibonacci retracement tool on the last bearish wave shows that the levels of 50% to 61.8% are located right around the bottom of the previous triangle.
This is also in line with dynamic resistance at the moving averages, with the 100 SMA below the 200 SMA reflecting negative feedback.
With that said, it looks like the 38.2% Fibonacci retracement has already held as a ceiling as it lines up with the broken S1 (90.78) of today’s pivot point set.
Extending at these levels would be a good strategy to try if you don’t want to miss out on another potential sell-off to the lows of 90.24. The continued bearish momentum could push AUD/JPY to the next support zones at S2 (89.97) and then S3 (89.18).
Stochastic is already in the overbought area which indicates that the buyers are exhausted and may be willing to let the sellers take over soon.
Just don’t forget that the Aussie got a boost in the Asian trading session, thanks to the upbeat Chinese Caixin Manufacturing PMI data. However, the return of risk aversion may end up supporting the safe-haven yen to rise again.
Also consider that AUD/JPY moves an average of 99.3 pips per dayso keep this number in mind when determining the entrances and exits!
This content is for informational purposes only and does not constitute investment advice. Trading in any financial market involves risks. Please read our Risk Disclosure Statement to ensure you understand the risks involved.
