AUD/JPY continues to show strong bullish momentum, driven by an extension within wave (3), which has pushed the pair out of its base channel and into new highs above the 109.40 level last seen in 2024. This breakout confirms the strength of the ongoing recovery that began from the April 2025 lows.
From a technical perspective, the broader uptrend remains intact. However, after such an extended move, a temporary pullback in wave (4) now appears likely. This corrective phase could find support within the 109.00–107.00 zone, providing a base for the next bullish leg.
As long as AUD/JPY holds above the key invalidation level at 100.95, the overall structure continues to favor further upside. Following the completion of wave (4), we anticipate a continuation higher into wave (5), which could drive the pair to fresh highs.
That said, traders should remain cautious of a potential shift in momentum. A strong and decisive move below the rising trendline support, currently near the 106.00 area, would be the first warning sign of a possible trend reversal.
In summary, the outlook remains bullish in the medium term, with short-term pullbacks seen as opportunities—unless key support levels begin to give way.
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