AUDJPY as a result of declines lasting since December 2014, reached support level 74.00, coinciding with a 61.8% Fibonacci correction from earlier gains, where a demand response occurred in June last year.
Looking at weekly chart, we notice that all previous downward movement was within a channel from which at the beginning of November last year pair left thru the top. As a result of later gains price reached the local (red) resistance zone, where in July there was a supply reaction.
If the declines continue, in nearest future we would expect to be able to test local support zone at 85.50 and 50% of the Fibonacci correction from earlier gains.
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In order for these drops to continue, we would have to overcome local support at 86.30. It is worth noting, however, that the market has still not tested from below (as support) level 87.36, which is currently coinciding with the 61.8% Fibonacci correction from the last downward impulse.
