AUD/JPY: where to from here, more downside below this key technical area?
Currently, AUD/JPY is trading at 82.50, down -1.79% on the day, having posted a daily high at 84.04 and low at 82.35.
Following a spooked market from the reports of Comey's memo about Trump's interference with the federal investigation, AUD/JPY has inevitably been offered on the back of the risk off environment as one of the markets risk-off barometers.
All the latest on Trump:
- US Dollar tumbles further on Trump jitters
- US: Trump’s travails starting to weigh on the dollar – ING
- US: Trump headlines stealing the show – Deutsche Bank
- Rep. Adam Schiff: Impeachment cannot be perceived as an effort to nullify the election by other means
- US Rep. Al Green: The President Must Be Impeached
- US House Speaker Ryan: Need the facts on Comey & Russia reporting - LiveSquawk
- US Rep. Al Green: Today, I will call for the impeachment of the President
The high beta currencies, such as the Aussie, would usually struggle during times of risk aversion, (Copper lower/iron ore higher) and while the Aussie has seen a bid today, this is only due to the US dollar taking a beating on the back of political tensions in the White House and a subsequent sell-off in yields that have been paid right down to 2.2104% in the US session today. The Aussie has been offered as high as 0.7444 today while the DXY dropped to lows of 97.48. Commodities have seen a limited response the events apart from Gold that has reached critical resistance as explained the following article: Gold intermarket: where now for Gold, its hit that key $1,260 target already?
With respect tot he Yen, offers have been as low as 111.80 for the dollar as the Dow Jones broke the key 200 smoothed sma at 2,070. The S&P 500 took on the same sma at 2,362. The momentum to the downside in stocks shows that investors are looking for safe havens and offshore opportunities while the dollar is weak. That is a trend that is likely to continue with ongoing concerns over the political and economic framework of the United States. The Asian session will be extra exciting with the Aussie jobs data and for the cross, it could be a roller coaster in Tokyo with the backdrop of Japanese GDP following Kuroda's recent hawkish remarks this week when he was "quite sure" the central bank could smoothly exit from its massive monetary stimulus when the appropriate time to do so.
AUD/JPY levels
Spot is presently trading at 82.51 and below the recent daily ranges since mid-April closing the bullish gap. This is a significant more to the downside technically and only a break back above the 200 day smoothed sma at 83.20 could neutralise some of this downside we have seen today. The 18th April lows of 81.47 is the 2017 low, supported to some extent by the 50 sma on the weekly time frames at 81.69 currently meeting the summer highs of 2016.