AUD/JPY jumped to a 7-month high on Monday but not broken the discipline of a broad upward channel it has been holding since end-May. By the middle of August, the rising channel got narrower with higher bottoms.
At 4:57 pm GMT, the pair was at 83.09, after rising as high as 83.30, its highest since May 14, and sharply higher than its previous close of 82.68.
As of now, the 83.90-84.90 region (R1) looks like a strong resistance for the pair, before retesting 88.03 (R2) the 1-1/2-year high it hit end-April.
On the downside, the pair has support at 79.71 (S1), near the 50 percent fibonacci retracement between 88.03 and 71.84. The pair may then target 78.14 (S2) before heading further south to the 76.2/5 (S3) region.
AUD/JPY rose on a view that China may not immediately react aggressively to this weekend's data that showed consumer prices rose by more than 5 percent in November.
The Asian giant had raised banks' reserve requirements for the sixth time this year on Friday, and the central bank's action just ahead of the key inflation data probably prompted investors to expect a policy rate hike after the low activity year-end days.