AUD/JPY continues to move higher slowly, within a short-term rising channel, but on a bigger picture, this move could be seen as a correction before the pair decides to drop lower again. Certainly, in the short-run, we could see AUD/JPY bouncing around within the channel boundaries, but overall, the near-term outlook remains negative in our view.
For now, we will keep monitoring AUD/JPY’s trading within the aforementioned channel. If AUD/JPY hits the 81.77 area and then reverses straight away down, this could be the sign of weakness that we were expecting, and the pair could make its way towards the lower bound of the rising channel for a quick test. If it breaks that bound and closes a 4-hour candle below it, then we will start examining lower levels like the 80.63, which was the low of the 19th of June. Further declines could lead to the 80.05 zone for a quick test.
On the other hand, a push higher above the 81.77 mark could lead the pair towards the 82.11 level, marked by yesterday’s high. Slightly above that we have the upper bound of the channel, which could turn the rate down, acting as a strong resistance.
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