“We should not be surprised, if the support level around 100.00 gives up.” This is the last sentence of a forecast called “The Bears Are Ready To Attack AUDJPY”, which we published on November 29th, when the pair was trading close to 101. Our expectations were based on the wave structure visible on the 30-minute chart of AUDJPY given below.
According to the Elliott Wave Principle, every 5-3 cycle, like the one shown on the chart, is followed by a move in the direction of the five-wave sequence. That is the reason why we anticipated that sooner or later AUDJPY should start declining again. On the next chart you will be able to see how the pair has been developing after this forecast.
As visible, the market decided to continue sideways for a while. However, this did not change the bearish expectations at all. As soon as this w-x-y double zig-zag retracement was over, the exchange rate resumed its downtrend. Last week the support zone around 100.00 finally gave up, which led to more weakness. Earlier today AUDJPY touched 96.80. Compared to the level it was at when the forecast was made, this is a sell-off of about 400 pips so far. Having in mind the big picture outlook, it may be just the beginning…
