Trend traders gather ’round!
AUD/JPY’s recent downswing took the pair to a MAJOR area of interest for AUD/JPY buyers.
Think the pair would find support from its current levels?
AUD/JPY 4-hour Forex Chart by TradingView
Late last week, currency intervention threats from both Japanese and U.S. officials pushed traders back into the yen.
USD/JPY took the brunt of the move, but yen crosses like AUD/JPY were hit hard as well, even with the Australian dollar getting mild support from gold pushing to fresh record highs near $5,000.
But that was last week. With no new jawboning from officials and attention shifting to other anticipated catalysts, traders may start fading intervention fears and reprice the broader uptrend in AUD/JPY.
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 has been in an uptrend since mid-November, but recently pulled back from 109.00 and is now trading near the 106.50 to 106.75 area.
As you can see, this zone aligns with the 61.8% Fibonacci retracement of last week’s upswing and sits close to the 4-hour chart’s 100 SMA and the lower boundary of the ascending channel.
If price holds above 106.50, AUD/JPY could stabilize and work back toward the 109.00 prior highs, with the 110.00 psychological level as the next upside reference.
However, a sustained move below the 100 SMA and the 106.00 area would likely reinforce bearish pressure and open the door for a deeper pullback toward the 105.00 to 105.50 previous area of interest.
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.
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