AUDJPY Breaking Down: Is a Test of 85 Possible?
Commentary – There is no change to the outlook for an AUDCAD breakout. The bullish count treats the choppy rally from .8271 as a series of 1s and 2s. Price does have support from the 200 day SMA now though. The pullback from the 1/15 high at .9180 gives those a chance to get in on this bull move that have yet to do so. The bias is bullish as long as price is above .8536 but potential support prior to that level is the 61.8% of .8536-.9180 at .8784.
Strategy – Bullish, against .8536, target TBD
Commentary – We wrote last week that “the AUDJPY has indeed plummeted recently before rallying significantly off of support from the 11/26 low. At this point, remain bearish as long as price is below 98.35.” The pair broke through the 11/26 low and there is no reason to fade this move yet. An initial objective is at the 100% extension of 107.84-92.99/100.15 at 85.31 although bearish potential is much greater.
Strategy – Bearish, move risk to 98.35 (from 100.15), target 85.50
Commentary – We have been patient but this pair is beginning to test that patience. We still maintain that wave 3 (or C) higher is underway as long as price is above 1.1149. One reason that we do not mind waiting so long is that the bullish potential is significant. The minimum objective is just above 1.2100 but bullish potential is still greater. The pair is having major problems with the 200 day SMA but the longer term structure is bullish (as long as price is above 1.1149).
Strategy – Bullish, against 1.1149, target much higher (above 1.2100)
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