Hello traders! The overall trend of the AUD/JPY remains strongly bullish, especially considering the rejection of the long-term uptrend trendline on the 4-hour chart.
Perhaps the current correction is providing yet another opportunity for buyers, and let’s see why. Price has formed a double bottom at 72.50 support area, after which broke above the downtrend trendline and the 50 Exponential Moving Average.
Considering the fact that the trend remains bullish, these breakouts could have been the confirmation that the trend is about to continue. Therefore, as long as the price remains above the 72.50 support, AUD/JPY is highly expected to continue moving north.
There are two resistance levels on the way up. The first is the previous top, which is 76.70 area. If that resistance will be penetrated, AUD/JPY will most likely move towards the key resistance at 79.28. This resistance is confirmed by two Fibonacci retracement levels, 661.8%, and 161.8%. The first was applied to the the correction when trendline was rejected for the first time. The second was applied to the current correction down.
All-in-all, there could be a potential 500 pips rally on the AUD/JPY currency pair. The trend could start to accelerate any time this week. But usually on Wednesdays prices get a crazy trend, which means that tomorrow it will be very interesting to watch AUD/JPY price action.
Bias: Strongly bullish while above 72.53
Potential Support Zone: 72.70 – 73.20
Potential Targets: 76.70, 79.28
Have a profitable trading!