AUD/JPY is on its way towards the bottom of the falling channel on the 4-hour time frame. A bounce might be in the cards since stochastic is indicating deeply oversold conditions.

The pair could find support at the 91.00 major psychological level, which is in line with the bottom of the channel. If you plan to go long at this area, set your stop below the bottom of the channel or below the previous lows.

Aiming for the middle of the channel could give at least a 1:1 return on risk while aiming for the channel resistance around 93.00 could mean a 2:1 return on risk.

By Kate Curtis from Trader’s Way