In a August 3 analysis entitled “AUDJPY breaks neckline of H&S formation, bears target 86.45“, I pointed out that the target would be 86.45 with possibility of deepening this movement to another support of 85.80. Exactly this scenario was realized on AUDJPY, and to complete this movement one bearish week was enough.
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At this point there is a very high probability of ending the declines. Even if there is no reversal of the trend, then at least an upward correction is expected. Much may depend on shape of Friday candle on the D1 interval. Chart below shows that candle D1 has a long lower shadow and demand managed to return AUDJPY above support of 85.80. However session lasts relatively short, so by the end of the day the shape of daily candle can change.
After a successful rebound from support at 85.80 bulls targets can increase respectively: 86.45, 88.00. The less likely scenario is breaking 85.80 without prior correction but this scenario also can not be ruled out. The first goal of bears after breaking this level would be area 84.80 – 84.50.