As expected the neck line is broken (AUDJPY continued)
On Tuesday’s analysis, I pointed formation of Head & Shoulders on AUDJPY and high probability of its activation by breaking the neckline in near future. Although we had to wait more than 24 hours for this break, the downward movement is already a fact.
The goal of the drops that can be measured by counting the distance from the top of the formation to the neck line exceeds 86.45. This means that the downward movement that should occur should lead the AUDJPY to at least 86.45, but the drops may also be deeper. If indicated level is broken though, then the next support will be 85.80 or lows from July 2017.
The last chance for bulls is the often occurring in H&S movement – pull-back to the broken neck line.In nearest hours there will be growth with goal at 88.00 and there again supply will start to sell pushing AUDJPY to the level of 86.45. It happens, however, that during pull-back journey price goes back over the neck line negating the formation. It is also a scenario that can not be ruled out, but in this particular situation it seems less likely.