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Chart Art: Channel Support Test on AUD/JPY

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This forex pair is hanging out at the very bottom of its ascending channel!

Is the trend still our friend or has AUD/JPY reached the bend at the end?

Let’s check out this 4-hour chart:

AUD/JPY 4-hour Forex Chart

AUD/JPY 4-hour Forex Chart by TV

Let’s start this trading week off by looking at this potential bounce on a yen pair!

Remember that directional biases and volatility conditions in market price are typically driven by fundamentals. If you haven’t yet done your fundie homework on the Australian dollar and the Japanese yen, then it’s time to do some work by checking out the forex calendar and stay updated on daily fundamental news!

AUD/JPY was on the move in the past week, thanks mostly to China’s data dump and Australia’s jobs report. The numbers came in mixed, causing the commodity currency to spike this way and that, along with overall market sentiment.

Still, price managed to keep its head above the rising channel support visible on the 4-hour time frame. However, it looks like the pair is now deciding whether or not to carry on with the climb.

The bottom of the channel lines up with the Pivot Point line (95.33) which adds to its strength as a potential floor. A return in bullish pressure right here could take AUD/JPY up to the next resistance levels.

Ones to keep an eye out for are R1 (96.10) near the 96.00 major psychological resistance and R2 (96.89) that’s right around the 97.00 handle and mid-channel area of interest.

Think we’ll see a downside breakout soon? Aussie bears (or yen bulls) can keep their eyes peeled for a move below the near-term support at S1 (94.55) that could take AUD/JPY down to the next possible floor at S2 (93.81).

Don’t forget that the BOJ decision is lined up early this week, so any major surprises from the Japanese central bank could spur another batch of big moves from this one!

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