This forex pair recently fell through its triangle bottom and is now in the middle of a correction.

Can AUD/JPY bounce off this resistance zone?

A couple of days ago, we were looking at this potential triangle breakout on AUD/JPY, and it looks like sellers came out on top.

If you missed this big move and are still AUD bearish, you might have a chance to hop in at a better price around these levels.

AUD/JPY 1-hour Forex Chart by TV

Applying the Fibonacci retracement tool on the latest wave down shows that the 50% to 61.8% levels are right around the former triangle bottom.

This is also in line with the dynamic resistance at the moving averages, with the 100 SMA below the 200 SMA to reflect bearish vibes.

However, the 38.2% Fib already seems to be holding as a ceiling since it lines up with the broken S1 (90.78) of today’s set of pivot points.

Scaling in at these levels could be a good strategy to try if you don’t want to miss out on another potential selloff to the lows at 90.24. Sustained bearish momentum might even take AUD/JPY down to the next support areas at S2 (89.97) then S3 (89.18).

Stochastic is already in the overbought region to suggest that buyers are exhausted and might be willing to let sellers take over soon.

Just don’t forget that the Aussie got a bit of a boost in the Asian trading session, thanks to upbeat Chinese Caixin manufacturing PMI data. Still, a return in risk aversion could wind up propping the safe-haven yen higher once more.

Also keep in mind that AUD/JPY moves an average of 99.3 pips per day, so take this figure into account when setting entries and exits!

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.