June 28, 2021 13:35:40
JPY has been on a bit of a rollercoaster ride in the wake of the surprisingly hawkish recent Fed meeting. Driven by US bond yields, it is now at a crossroads as weaker yields at the long end of the curve have reversed. While USD/JPY hit a new high late last week above 111, the major has fallen back and is trading below the prior cycle high at 110.96.
AUD/JPY on/off
We’ve written before about AUD/JPY being one indicator traders can use to identify market risk sentiment as it incorporates two of the market’s most important “risk on” and “risk off” currencies – AUD which correlates strongly with commodities and China and JPY which is a traditional safe haven currency. Similarly, as yields have risen so this pair has bounced off the lower Keltner channel and after the daily RSI dropped into deeply oversold territory below 30.
Prices are now back into the middle of the previous multi-month range and currently sit on the 100-day SMA. Momentum indicators are still bearish with the 50-day SMA acting as near-term resistance above at 84.37 so a decisive break of the longer-term SMA at 83.85 should see more downside.
4-Hour Chart rolling over
We can see on the 4-hour chart how the pair has bounced strongly but come up against a previous level of resistance around 84.28. The upper Keltner channel has also acted as a barrier to more upside and prices now look to be rolling over as bearish momentum picks up again. Near-term targets if the pair continues lower include 83.49 and 83 ahead of the cycle low at 82.13.
Although Moneta Markets aims to ensure that the information/material is accurate, it cannot be held responsible for any omissions/miscalculations or mistakes as it does not warrant the accuracy of such material. Any material and/or content provided herein is intended for educational purposes only and does not constitute investment advice on how clients should trade as it does not take into consideration your personal objectives, financial circumstances or needs. Please seek independent advice before making any trading decisions. Reliance on such material is solely at your own risk and Moneta Markets cannot be held responsible for any losses resulting directly or indirectly from such reliance. Any reference to figures/statistics or numbers refers to the group of companies of Moneta Markets. Please refer to the legeal documents should you require more information.
