AUD/JPY has been forming a rising channel on its daily time frame, indicating that the longer-term uptrend is still valid. The pair is even finding support at the middle of the channel and might be headed back for the top around the 97.00 levels.
Stochastic has made lower lows while price made higher lows recently, forming a bullish divergence. Reversal candlesticks can also be seen around the 94.00 major psychological support and area of interest.
Going long at 94.00 with a 150-pip stop and a target of 97.00 could yield a 2:1 return on risk. Take note that the middle of the channel is also the 50% retracement from the latest swing high and low, making it a solid support area in case the fundamental bias for the pair is still to the upside.
By Kate Curtis from Trader’s Way