6 Nov 2013
AUD/JPY reflecting the indecision in the risk markets. To pull back or not to pull back?
FXstreet.com (Barcelona) - The AUD/JPY is alternating between taking direction from the data flow from the two countries and from the general mood towards risk globally.
AUD/JPY is acting as if everything is great globally – reality or wishful thinking?
Technicians and strategists say more of a pullback in risk assets (including AUD/JPY) would be very healthy for the long-term sustainability of the current bull market. As evidenced by the buoyancy in the US equity markets Tuesday, even with somewhat ugly internals and sluggishness by the higher-beta parts of the market, the flagship indices were able to keep losses to a minimum. Whether it’s the trend following computers that are in there buying every dip or the government puppet masters, someone or something does not want to let these markets go through normal, healthy pullbacks.
The news flow directly related to the AUD/JPY cross continued Wednesday with the Bank of Japan’s meeting minutes earlier today. Australia’s Trade Balance data was also released shortly thereafter. The net result of all of this data was an AUD/JPY that oscillated up and down violently before making the most recent pop to the upside which took the cross back up above pre-data levels.
Technical outlook for AUD/JPY
Technicians say the AUD/JPY’s chart indicates that the cross should definitely eventually move higher but that a short-term pullback seemed to be in order soon. Support or the downside target for AUD/JPY on that pullback – if it happens – is 92.77 and/or 90.98 below that. Resistance comes in at the 10/27 peak at 93.967 and is backed up by the 10/24 peak at 94.34.
AUD/JPY is acting as if everything is great globally – reality or wishful thinking?
Technicians and strategists say more of a pullback in risk assets (including AUD/JPY) would be very healthy for the long-term sustainability of the current bull market. As evidenced by the buoyancy in the US equity markets Tuesday, even with somewhat ugly internals and sluggishness by the higher-beta parts of the market, the flagship indices were able to keep losses to a minimum. Whether it’s the trend following computers that are in there buying every dip or the government puppet masters, someone or something does not want to let these markets go through normal, healthy pullbacks.
The news flow directly related to the AUD/JPY cross continued Wednesday with the Bank of Japan’s meeting minutes earlier today. Australia’s Trade Balance data was also released shortly thereafter. The net result of all of this data was an AUD/JPY that oscillated up and down violently before making the most recent pop to the upside which took the cross back up above pre-data levels.
Technical outlook for AUD/JPY
Technicians say the AUD/JPY’s chart indicates that the cross should definitely eventually move higher but that a short-term pullback seemed to be in order soon. Support or the downside target for AUD/JPY on that pullback – if it happens – is 92.77 and/or 90.98 below that. Resistance comes in at the 10/27 peak at 93.967 and is backed up by the 10/24 peak at 94.34.