AUDJPY Finds Confluence At 112.50 Area Of Interest

AUDJPY broke down from the descending channel it had been consolidating in throughout June, slicing below the 112.50 minor psychological support zone that had been holding for weeks.

This confirmed a resumption of the broader downtrend, with price extending its slide to a low around 111.11 before staging a recovery back toward the broken support area.

Price is now testing this former floor as potential resistance, so the pair’s next move could hinge on whether sellers are able to defend this zone. The Fibonacci retracement tool, drawn from the 111.11 swing low to the 114.92 swing high, highlights levels where sellers could be waiting to jump back in.

The 38.2% Fib lines up with the broken support at 112.57, while the 50% level sits at 113.02. A deeper pullback could reach the 61.8% Fib at 113.47, which lines up with the previous consolidation range and could be the line in the sand for the bearish trend to resume.

If the retest of these Fib levels is rejected, AUDJPY could resume its slide toward the 111.11 low or lower. On the other hand, a break back above the 61.8% Fib could suggest that buyers are ready to take the wheel and challenge the June highs.

The 100 SMA remains below the 200 SMA, confirming that the path of least resistance is still to the downside, even though the gap between the indicators has narrowed as price staged its latest bounce. Price is holding just below both moving averages, which could reinforce the zone as dynamic resistance on any further upside attempts.

Stochastic has climbed back up toward the overbought region, hinting that the recovery could be running out of steam, so a turn lower from here would support the case for another leg down. RSI is also approaching familiar resistance near the 60 to 70 area, so a failure to break higher could keep sellers in control.