Overnight comments on AUD/JPY from Société Générale
AUD/JPY successfully defended the graphical support at 72.50 last year after which it broke above a multiyear down sloping channel confirming a bullish reversal.
- It formed an interim top near January 2014 levels of 88.50/89.00 and has been witnessing a pause.
- Last month, it formed a bullish engulfing pattern that has encompassed the price action of previous six months suggesting resumption in up move.
- It is worth noting that the pair appears to be evolving within the right shoulder of an inverse Head and Shoulders.
Short term, it looks poised to head towards the neckline and recent highs of 88.50/89.00. A break above will mean an extended up move towards weekly channel upper limit near 92.80. 86 will be an immediate support while recent highs of 84.50 should cushion near term downside.
