2025-12-16 02:22:00
AUD/JPY has formed higher lows and higher highs inside an ascending channel on the 4-hour chart.
Is the friend still our friend on this one?
Take a look at these potential support levels!
The Reserve Bank of Australia’s (RBA) shift to a less dovish stance sparked a steady climb for the Aussie, enabling AUD/JPY to cruise inside a rising channel since last month.
However, strengthening expectations of a Bank of Japan (BOJ) interest rate hike soon are also boosting the Japanese currency and allowing the channel top to hold as a ceiling.
Can the pair find support again soon?
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!
Price is closing in on the 50% Fibonacci retracement level near the 100 SMA dynamic support and S2 (102.17), which also happens to be just above the channel bottom.
A larger correction could still reach the 61.8% Fib closer to the 102.00 major psychological support, which could be the line in the sand for a bullish correction.
Keep your eyes peeled for reversal candlesticks that could hint at a bounce off these levels, possibly taking AUD/JPY back up to the swing high and channel top near R1 (104.41).
On the other hand, long red candles closing below the channel support could suggest that bears are taking over and could spur a reversal down to the next bearish targets at S3 (101.44) then S4 (100.70).
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.
