AUD/JPY: plenty of key risks ahead while price threatens topside breakout
|- AUD/JPY is moving sideways in consolidaton of the recent ascent from the 74.6% Fibo of the 26th October lows.
- AUD/JPY is at a crossroads and its make or break-time at the top of the descending channel's resistance.
The cross acts as the FX-space's risk barometer and has been better bid for a number of sessions with the cross picking up the positive tones and recovery flows from improved risk sentiment in global markets. However, there is still plenty of money on the sidelines which can tip the balance one way or the other depending on the outcome of various outstanding uncertainties such as global trade and global economic performances.
The week ahead is a busy one
The week ahead holds plenty of risk factors from the US mid-term elections to the RBA later today. The RBA is not expected to throw in anything new to the mix but remains a risk all of the same. The policy decision is due at 2:30pm Syd/11:30am Sing/HK and the cash rate is firmly on hold at 1.5% for some time. The October Board minutes were repeating that “there was no strong case for a near-term adjustment in monetary policy.” The statement is unlikely to add anything we don't already know and it should be a non-event whereas we are likely to see more action in the yen from the US elections courtesy of swings in the greenback and stock markets.
AUD/JPY levels
AUD/JPY bulls are firm and defending the 23.6% Fibo level. However, a break there opens 80.50 as the first key target that has a confluence of the 38.2% fib and 200-$hr SMA. 79.20 can then be targetted ahead of the 78.50 target as the 26th Oct low. On the upside, R2 is located at 82.38 (the breakout point of channel level). 83.93 guards a breakout away from the descending daily channel.
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