AUDJPY moved as high as 88.64 but found strong support and took a strong fall. The currency pair went as low as 85.18 before closing for the week at 86.19.
On one hand such a strong fall would make us expect some more downward move but on the other hand the current price level is quite sensitive to support for AUD/JPY. The following points need to be considered while analyzing the probable moves in the coming days:
1) 85.00 is now a psychological support and the recent support came just over this level. 85.00 support was broken on March 7th but the pair had immediately jumped up. To a new recent high. A decisive break of this is required to expect any further downward correction.
2) For two consecutive days AUDJPY tried to break the support of 55-day EMA but has been finding strong support to close much above it. A decisive break of this is required to expect any further downward moves.
3) This support for past 2 trading days was also just below the upper edge of the daily Ichimoku cloud. The on both the days this support was broken but the immediate upward jump made AUDJPY to close above the upper edge of the cloud.
Considering the above mentioned points we see that there are three strong support levels working at the current price level. A decisive break of these is required to have our focus for further downward movement. One thing which goes in favor of further downward consolidation is the effect of the very strong psychological resistance of 90.00. AUDJPY was moving towards it.
In case a decisive break of first 85.00 psychological level and then the recent 84.81/84.80 (March 7th) takes place then we can expect the consolidation to continue towards 84.00/83.80. This consolidation would represent Fibonacci 38.2% retracement of the upward move during December 16th, 2011 to march 19th, 2012.
On the upside another break of 88.64 should bring frequent resistances because of the approaching psychological level of 90.00 and we would expect a slow upward once there is a break over this recent high (88.64). But such a break should first take the currency pair towards 89.60 before trying to test 90.00 level.
Further Readings:
1) AUD/JPY forecast for the weekly outlook of the currency pair.
3) GBP/JPY forecast & outlook.
By forexabode.com