AUD/JPY heavy, Wednesday’s low tested amid risk-off

The AUD/JPY cross remains under heavy selling pressure mainly driven by a rebound in the Japanese yen against its American counterpart, while ongoing weakness seen in the Aussie also adds to the weakness.

The cross drops -0.45% to trade near fresh session lows of 86.20, having tested Wednesday’s low of 86.21. The selling pressure behind AUDJPY intensified last hour after the retreat in USD/JPY from two-week tops gathered steam amid falling treasury yields, which accelerated the corrective slide in the greenback versus its main competitors.

Moreover, weaker-than expected China’s services PMI data added to the ongoing declines in the Aussie dollar, while widespread risk-aversion ahead of Fed Chair Yellen’s speech also collaborated to the downside in the risk-gauge, AUD/JPY.

Technical Levels

Higher side: 86.60/65 (5 & 10-DMA)), 86.85/87.00 (20-DMA/ round figure), 87.50 (Fib R2/ psychological levels)

Lower side: 85.80 (Feb-end lows), 85.18/14 (Classic S3/ 50-DMA), 84.99/96 (Jan-mid lows)