AUDJPY has been carving out higher lows connected by a rising trend line that has held firm throughout the past several weeks, and the pair recently surged to a swing high near the 111.46 level before pulling back to digest those gains.

Price is currently testing the Fibonacci retracement levels drawn from the latest leg up, which could attract more buyers looking to join the ongoing climb at a better entry.

The 38.2% Fib is at 110.42, which is close to where price is hovering at the moment and could be enough to draw in bullish momentum. A deeper correction could still reach the 50% level at 110.09 or the 61.8% Fib at 109.77, which aligns closely with the ascending trend line and could serve as the line in the sand for a bullish pullback.

If any of these hold as a floor, AUDJPY could resume the rally back toward the swing high at 111.46 or higher. A breakdown, on the other hand, could mark the start of a reversal.

The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside, suggesting the climb is more likely to gain traction than to reverse. The gap between the indicators has been widening steadily over the course of the uptrend, reflecting strengthening bullish pressure beneath the surface.

Stochastic, however, is heading south from the overbought region, reflecting a return in selling pressure in the near term. The oscillator has room to slide before reaching oversold territory, which means the pullback could keep going before buyers step back in.

RSI is also pointing lower and has some ground to cover before reaching oversold levels, suggesting that price could keep following suit while sellers have the upper hand for now.

AUD has drawn support from stronger March RBA tightening expectations after the Australian CPI report released earlier in the week beat estimates, while the yen has been on the back foot due to political pressure on the BOJ to maintain policy.