With Japanese Yen benefiting from safe haven flows in the face of ‘Greferendum’ and ‘Grexit’ then AUDJPY is firmly on my watch list for a bearish move to unfold.
The Japanese Yen has benefited from safe haven flows over the weekend which saw AUDJPY, like most markets, experience an extreme gap at market open on Monday.
The zone I am paying particular interest to is between 94.40-70 as this has been a pivotal area since Dec 2012. Whilst it has clearly traded either side of this zone with various amounts of noise, there have also been periods of time when it has acted as a decent cushion of support and resistance.
More recently we can see between May and June this year it experienced three failed attempt to break down, to create a rather messy Triple Top formation. Interestingly the high of the Triple Top at 97.30 is a 161.8% projection from the 90.16 low to suggest this is the end of a correction and for futher losses to follow.
It could be argued that yesterday's low of 92.62 has already achieved the initial target projected by the Triple Top but, due to my confidence in the 94.40-70 resistance zone, feel there may more downside in the move left.
I am targeting 91.80 and at current levels, this may provide a decent reward / risk ratio assuming the 94.70 resistance continues to hold.