AUDJPY corrects sharply lower, what happens next?


Not so long ago, we posted a bullish analysis for the AUDJPY cross. It managed to hit our target at previous highs, but the cross stopped right there and was sold-off sharply, posting a large double top pattern.

On Friday afternoon, the AUDJPY cross was down 1% and was trading at around 75.00, erasing nearly all of the gains from the recent rally. 

That seems to be the first significant support as previous highs are located here. If the level is taken out to the downside, the Aussie could decline some 30 pips more to hit the short-term uptrend line. 

Moreover, another support level is seen near 74.00, and as long as the cross trades above this support, the medium-term outlook still seems bullish.

Alternatively, if the price starts rallying again, the first resistance seems to be at around 75.20, and if bulls push the price above this resistance, we could see another leg higher toward 75.70.
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