As we planned in the weekly report here, we’ve sold AUD/JPY today at 80.25 when the cross recovered to 80.43 after RBA rate decision. Currently, the AUD/JPY is in consolidation pattern from 79.51 temporary low and it’s uncertain how long such consolidation will last. Hence, we’ll keep the stop unchanged at 81.00. That is slightly above 61.8% retracement of 81.78 to 79.51 at 80.91, as well as 4 hour 55 EMA (now at 80.76). We’ll lower the stop when AUD/JPY breaks 79.51 low.
Overall outlook is unchanged that AUD/JPY is extending the larger down trend form 90.29. First target is 61.8% projection of 83.92 to 79.69 from 81.78 at 79.16. This level is close to 61.8% retracement of 72.39 to 90.29 at 79.22. Even though it’s a cluster, based on current momentum, we’d expect it to be taken out with relative ease. The real test lies in 77.55/85 (61.8% projection of 90.29 to 80.48 from 83.92 at 77.85, 100% projection of 83.92 to 79.69 from 81.78 at 77.55). We haven’t decided whether to get out from there yet and will look at the downside momentum to decide.
We’re indeed looking at the prospect of deeper fall towards 72.39 low, as the rejection from falling 55 week EMA was rather bearish in medium term.
