Aussie recouping versus YEN
|AUDJPY, H4
Overnight, Asian markets were hit by the Moody’s ratings downgrade for China, which was cut to A1 from Aa3 and left investors wrong footed and CSI 300 and Hang Seng in negative territory. The ASX is little changed, while Japanese bourses managed to outperform, benefiting from a weaker Yen.
USDJPY has been on the ebb amid a backdrop of mixed stock markets and somewhat neutral risk appetite, spoiled by Moody’s downgrade of China (although China’s finance ministry hit back, saying that the rating agency “has overestimated the difficulties faced by China’s economy and underestimated the government’s ability to deepen reforms”).
Other yen crosses such as AUDJPY drifted nearly 40 pips southward after logging a peak at 83.69, overnight. However today Aussie manage to gain back overnight’s losses, since it is currently traded at 83.61. Today’s rise of AUDJPY back above 200-Day EMA, prompted a Long Position, with Entry at 83.59, since the pair is looking that it might extend further up its enlargements since last Thursday. In the 4-hour chart, it hits twice today the 200-period EMA, while a Tweezer Bottoms noticed at 83.24, which provided further confirmation of further strength of the pair. Target 1 was set at 83.80, which is a confluence of 50-Day moving average and 23.6 Fibonacci Level. Target 2 at 84.00 and Support at 83.10.
Importantly is the fact that as per the chart above, RSI presents a positive slope since May 17th after reaching oversold territory. Hence currently RSI is at 59, with its positive slope indicating that there is space for further positive upwards momentum until overbought territory. On the other hand, MACD turned positive just yesterday.
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