AUDJPY testing previous highs

The AUDJPY cross fell yesterday as sentiment worsened, but it was trading flat on Friday, changing hands at around 77.20 ahead of US data.

The critical support for the cross now stands at 76.85, where the previous cycle highs stand. So far, it looks like a nice triangle pattern, with an upside breakout. Sometimes, a retest of previous highs happens and if the bullish break was not false, the market should turn higher and post higher highs.

We will see, with volatility expected to be elevated after today's US labor market data.

If the support is not held, we could see a decline toward 76.10/20, where the summer uptrend line is located. More importantly, a decline below that support would most likely mean that the previous bullish breakout was a false one, and the short-term trend could then switch to bearish. 

Alternatively, if the Aussie starts rallying again, the resistance should be near 77.50, with another target for bulls near the current cycle highs at 78.45.

The AUDJPY cross is closely correlated to US stocks, so we are guessing the stock market will continue to set the Australian dollar direction. 
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