AUD/JPY screams ‘risk-off’
|The risk-off tone seen earlier this month looks set to continue and probably worsen this week, given the AUD/JPY pair has dropped to a near three-month low of 84.06 this Monday morning.
Trump fails in his first test
Trump’s failure to get the health care bill passed is forcing investors to question whether the Author of ‘The Art of the Deal’ would be able to deliver on fiscal front.
This is evident from the drop in the US dollar index and the strength in the safe haven Japanese Yen. Aussie dollar which has been a major beneficiary of the Trump-led rally in the commodities is now under pressure as well.
THus, the AUD/JPY cross is widely considered as a barometer of risk sentiment. The pair was last seen trading around 84.05 levels. The losses clearly point to worsening of the risk aversion during the day ahead.
S&P 500 futures are already down close to 0.80%, which is line with the sell-off in the AUD/JPY pair.
AUD/JPY Technical Levels
The daily ADX line has bottomed out and is now sloping higher, which indicates the bears are gaining strength. A break below 84.00 (zero figure) could yield 83.74 (Dec 29 low). A daily close below the same would attract fresh offers and take the pair down to sub-83.00 levels. On the higher side, key resistance levels are 84.96 (5-DMA) and 85.19 (50-DMA). Only a daily close above the 50-DMA would shift risk in favor of a technical correction to 85.85 (Mar 9 low).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.