AUD/JPY jumps to 3-month high on Yen selling & the iron ore rally
|AUD/JPY cross jumped to 85.33; the highest level since March 31st on the back of broad based Yen selling and the surge in iron ore prices.
Yen weakens as T-yields rise, ignores losses on Wall Street
The Japanese Yen came under pressure as the benchmark 10-year treasury yield rose 6 basis points to 2.20%. Yields rose on hawkish comments from Draghi and Yellen, thus pushing the Yen lower despite a 1.61 % drop in the NASDAQ and 0.8% slide in the S&P 500.
Iron ore logs largest single day gain in four months
Aussie dollar remained well bid in the overnight trade despite the uptick in the treasury yields mainly due to a big jump in the iron ore prices. According to Metal Bulletin, the spot price for benchmark 62% fines soared 5.2% to $59.70/tonne, marking its largest one-day percentage increase since February 13 this year.
Thus, the AUD/JPY cross, rose to 3-month highs. The pair was last seen trading around 85.15 levels. Asian stocks have got off to a weak start this Wednesday morning and that could cap further gains in the AUD/JPY cross.
AUD/JPY Technical Levels
A break above 85.36 (Feb 9 low) would expose 85.85 (Mar 9 low) and 86.00 levels. On the downside, breach of support at 85.00 (zero levels) would open up downside towards 84.67 (5-DMA) and 84.45 (100-DMA) levels. The daily RSI remains bullish and well short of the overbought territory, suggesting scope for further gains in the pair.
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