Both AUD/JPY and NZD/JPY experienced deep selloff since yesterday, and the developments should confirm that extended correction is underway. AUD/JPY’s fall from 85.78 is seen as correcting the rise from 73.12 to 85.78 only at this point. Deeper decline is expected as long as 83.95 support holds. Next target is 38.2% retracement of 73.12 to 85.78 at 80.94. We’d expect strong support from there to bring rebound. However, sustained break of 80.94 would raise the chance that it’s a larger scale correction to whole up trend from 59.85. Further fall could be seen back into 73.12/78.44 support zone in this bearish case.
Similarly, NZD/JPY is seen as correcting the rise from 68.86 to 80.17. Deeper fall is expected as long as 78.06 resistance holds, to 38.2% retracement of 68.86 to 80.17 at 75.84. We’d expect strong support from there to bring rebound. However, sustained break of 75.84 would argue that it’s in a larger scale correction to whole up trend from 59.49. Further decline could then be seen back into 68.86/71.66 support zone in this bearish case.
