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The Aussie has been rallying for thew last 12 months against the Yen, reaching higher than initially expected, according to Nicole Elliott, senior technical analyst at Mizuho Corporate Bank, who warns about a pullback below trendline support targeting 74.00 later on this quarter.

The Pair's rally has extended above expectations, according to Elliott, who warns about instability signs: "Interestingly bullish momentum did nothing but decline last year, suggesting we may be watching a ‘wedge’ formation in the making. Though not overbought small signs of instability last week, here and in a series of Yen crosses, with potentially an ‘evening star’ forming this month."

On the downside, Elliott points out to 84.25 level to add weight to this view: " monthly close below 84.25 would add weight to this view suggesting the squeeze to 86.20 was an ‘extension’. Some time in Q1 2010 we favour a drop to through trendline support to 74.00."