Analysis: AUD/JPY Facing Potential Upside Momentum

Analysis: AUD/JPY Facing Potential Upside Momentum

The AUD/JPY currency pair experienced moderate gains on Wednesday, recording a 0.46% increase. However, it started Thursday’s session on a slightly lower note, trading below the previous day’s close of 96.42. Despite this, the pair has shown potential for further gains as buyers reclaim the Kijun-Sen and find support around the bottom of the Ichimoku Cloud (Kumo). While the pair remains range-bound, the formation of a ‘bullish-harami’ candlestick pattern augurs well for possible upside momentum.

Potential Upside Targets

To resume its bullish trend, the AUD/JPY pair would need to break through the January 2 high of 96.71. This level would act as an initial resistance, followed by the key psychological level of 97.00. If the pair manages to surpass these levels, the next resistance level to watch out for would be the June 19 high at 97.67. Beyond that, the 98.00 level would be an important psychological barrier to breach.

Downside Risks

However, if sellers manage to prevent the AUD/JPY pair from advancing above 96.71, they could exert downward pressure and push prices towards the Senkou Span B at 96.14. Further downside support lies at the Kijun Sen level of 95.90. Should these levels be breached, the next demand area to test would be the December 14 low of 94.58.

Although the AUD/JPY pair experienced a slight setback at the start of Thursday’s session, the presence of the bullish-harami candlestick pattern and the support from the Kijun-Sen and Ichimoku Cloud indicate the potential for upside momentum. Buyers will be targeting the January 2 high and the 97.00 mark as their immediate goals. On the downside, sellers will aim to prevent the pair from exceeding the 96.71 resistance level. As both buyers and sellers monitor these key levels, the AUD/JPY pair remains within a range-bound state, waiting for a catalyst to determine its future direction.

Technical Analysis

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