AUD/JPY’s Big Breakout Boosts Bullish Bias
|For the second day in a row, the Japanese yen is the weakest major currency as today’s heavy risk-on bent leads to selling in the safe haven currency. Meanwhile, the aussie has caught a big bid despite the RBA citing “increased risks” to the household sector.
As a result, AUD/JPY is seeing a big bullish breakout from its 3-month, 230-pip range. After a prolonged period of tight rangebound trading, the pair could see a strong bullish continuation from here; indeed, the “measured move” objective of the breakout from the Q1 range projects a move up toward the mid-December high near 82.25, as the chart below shows:
Source: TradingView, FOREX.com
From an intermarket perspective, AUD/JPY is seen as a barometer for risk appetite across all markets.This means that a continued rally in the pair could help drive US stock indices to record highs as we move through earnings season. Conversely, traditional “safe haven” assets like government bonds and gold may face headwinds moving forward.
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