AUD/JPY has been consolidating since marking a high on the year at 102.84 in November. It has gotten into a range, and is now pushing towards range support. Let’s take a look at the charts to assess the technical developments.
AUD/JPY failed to break above range resistance which is around 101.35. Instead, it is retreating and approaching range support near 99.90. The prevailing trend is still bullish, so we should expect some support around this range low, even if it is broken. 99.70 has a previous resistance pivot, and the 200-period SMA is around 99.50. If price gets into this area, and the 4H RSI is oversold, consider a buy. A long entry at 99.90 with a stop at 99.30 fore example has a 60-pip risk. Compare that to the conservative target of 100.50, which has 60-pip reward, and a slightly more aggressive target back toward the range high around 101.30, with a reward to risk ratio slightly better than 2:1.
If price fails to rebound back above 100.50, look out for more bearish correction with risk towards November’s lows in the 98-98.50 area.
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