AUD/JPY Breaks Free. Bullish Momentum Unleashed

By Tomasz Wisniewski|

Published: January 11 2024, 07:29 GMT+0

AUD/JPY Breaks Free. Bullish Momentum Unleashed

The Australian Dollar against the Japanese Yen (AUD/JPY) has been exhibiting a remarkable upward trajectory, recently breaking free from a symmetric triangle pattern, as outlined by the blue lines on the chart. This breakout is not just a technical achievement; it signifies a strong bullish momentum that has been building up in the pair. Accompanying this upward movement is the breach of a key horizontal resistance, identified by the green color on the chart, which further validates the strength of the current trend.

The recent surge in AUD/JPY is nothing short of impressive. However, in the world of forex trading, such steep ascents often invite the possibility of bearish corrections. A pullback, potentially even one strong enough to drag the pair below the recently surpassed green resistance, cannot be ruled out. Such corrections are natural and healthy in sustaining long-term trends. They offer opportunities for traders who might have missed the initial wave of the uptrend to participate in the ongoing bullish narrative.

Despite the potential for a retracement, the primary buy signal remains robust and will continue to hold as long as AUD/JPY sustains its position above the confines of the triangle pattern. The break above this pattern has set a bullish precedent, and only a return within the triangle’s boundaries would dampen this outlook. A move back into the triangle would not only signify a loss of bullish momentum but would also trigger a sell signal based on a false breakout scenario. However, given the current market dynamics and the strength exhibited by AUD/JPY, the likelihood of such a bearish turnaround appears limited at this juncture.