AUD/JPY dips mildly today as Australia Dollar pulls back broadly. This is in response to China’s new hostile trade action in banning Australian coals. Though, the retreat in AUD/JPY is shallow so far and doesn’t warrant a reversal yet. Further rise will remain in favor as long as 77.09 resistance turned support holds.
Still, we’d emphasize that the real test lies in long term channel resistance (started back at 105.42 in 2013). Sustained break there will be a strong signal of an emerging bullish trend and pave the way to 61.8% projection of 59.89 to 78.46 from 73.13 at 84.60 in the medium term. However, rejection by the channel resistance, followed by break of 77.09 support, will retain long term bearishness and turn focus back to 73.13 support.
