- The Australian dollar fell off the cliff against the Japanese yen, down 0.77%.
- Market sentiment has improved in the session, but in the FX market, safe-haven peers rise.
- AUD/JPY bears look forward to a Weekly/Friday close below 80.70, which would increase the odds for a fall towards 78.78.
On Friday, as the North American session progresses, the AUD/JPY plunges close to 100-pips in the day. At the time of writing is trading at 80.47. Risk-sensitive currencies like the Australian and New Zealand dollar extended their slide vs. the Japanese yen for the second consecutive day, since Wednesday when the Federal Reserve officially signaled that they would hike rates “soon.”
The AUD/JPY seesawed at the announcement, though it remained within familiar levels. However, as Fed Chair Jerome Powell hit the stage, he noted that the US central bank might raise rates in March. The signal was clear for investors, as risk aversion appeared while market participants scrambled towards safer assets. In the FX complex, flows went to the USD and the JPY.
In the meantime, US equities trade in the green at press time, reflecting a slight improvement in appetite. Nevertheless, month-end flows will keep the greenback and the JPY in the front foot until the next month.
Fundamentally speaking, the AUD/JPY should be headed to the upside, based on central bank divergence. However, risk sentiment weighed on the Australian dollar. Also, the economic deceleration of China, and the People’s Bank of China (PBoC) cutting rates, signals nervousness of the communist party regarding the Asian giant economic outlook.
AUD/JPY Price Forecast: Technical outlook
The AUD/JPY depicts the pair as downward biased. Daily moving averages (DMAs) reside well above the spot price, around the 81.98-82.37 range. The break under January 24 daily low at 80.69, immediately exposed December 20, 2021, low at 80.27. A breach of the latter might send the pair tumbling close to 150-pips to the following support level located at 78.79, the December 3, 2021, daily 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. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD challenges 1.0500 on Dollar's bounce
The US Dollar now picks up further pace and weighs on the risk-associated assets, sending EUR/USD to the boundaries of the key 1.0500 region and at shouting distance from its 2024 lows.
GBP/USD remains weak and puts 1.2600 to the test
GBP/USD remains on the back foot and now approaches the key support at 1.2600 the figure in response to the resurgence of the bid bias in the Greenback.
Gold faces extra upside near term
Gold extends its bullish momentum further above $2,660 on Thursday. XAU/USD rises for the fourth straight day, sponsored by geopolitical risks stemming from the worsening Russia-Ukraine war. Markets await comments from Fed policymakers.
BTC hits an all-time high above $97,850, inches away from the $100K mark
Bitcoin hit a new all-time high of $97,852 on Thursday, and the technical outlook suggests a possible continuation of the rally to $100,000. BTC futures have surged past the $100,000 price mark on Deribit, and Lookonchain data shows whales are accumulating.
A new horizon: The economic outlook in a new leadership and policy era
The economic aftershocks of the COVID pandemic, which have dominated the economic landscape over the past few years, are steadily dissipating. These pandemic-induced economic effects are set to be largely supplanted by economic policy changes that are on the horizon in the United States.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.