A 300 pip target is perhaps a conservative objective, all things considered. However, the 82.10 handle is the 2015 low and is therefore sure to attract buyers if indeed we see a retest of the level in the coming sessions.
What exactly has me thinking that such a move is likely, you ask?
You may recall from previous posts the ascending channel that has been forming on AUDJPY since the 2015 low was carved out last August. Since its inception, I have viewed this period of consolidation as corrective following the late August 2015 selloff that saw the pair lose more than 400 pips in a single day.
With yesterday’s close, the four-month price structure becomes more than just simple consolidation. It now has the markings of a continuation pattern that could extend the bear trend that began in November of 2014 to prices as low as 74.50 over the coming months.
From here it’s business as usual. A retest of former channel support as new resistance could offer a favorable opportunity to get short. Key support comes in at 82.10, 80 as well as the 2012 low at 74.50.
