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Hugo in HTO Trading,

AUDJPY: Within a well-defined downward channel

Since the start of the year the currency lost 9.5% however last week fell more than 1.0% and is in a recovery phase since mid-July 2016.

Last week the AUDJPY fell with a narrow range and close near the low of the week, although managed to close within the previous week range, creating an inside week, in addition indicating being slightly on the bearish side of neutral.

Stochastic is showing a strong bullish momentum however is still below the 50 mid line.

Expecting an upward move to a key level at 83.400 on a break above the previous week high at 80.774 (scenario 1) but a break below the previous week low at 78.90 could drag down the currency to a weekly support at 75.621 (scenario 2).