Markets busy going nowhere

There hasn’t been a strong theme in forex markets so far today.  European stock markets have mostly declined, as risk aversion picked up in Europe.  Investors still found some positives in Chinese GDP numbers, which slowed as expected but also showed signs of stabilisation in some areas.

Meanwile, USDJPY has traded moderately softer, though has held within Friday’s range so far. An intraday low was printed at 109.47. AUDJPY saw a similar incline, but also remained within its range seen on Friday. It is currently trading at 78.50.

As the Yen weakens amid a risk-back-on theme in global markets, AUDJPY remains for the 3rd consecutive day near the key level at 79.00, recoup so far nearly 60% of December’s losses. The overall weakness of Aussie does not seem to have faded yet, proven by strong bear candles keeping the asset below 2-year Support, which has not being converted to Resistance, at 78.50-78.80 area.

However, January has proven beneficiary for the asset, hence in the near future, a break of this strong barrier could attract more bulls, which could lift the asset back in the 81 zone. Oppositely, a crossing below 77.20 level should turn the outlook into a negative one, as this level presents the move below 20-day SMA, latest low fractal and the 50% Fibonacci retracement level.

Daily momentum indicators are mixed, as RSI sis struggling to cross above 50 , while MACD continues to accelerate higher. This picture imply to a poor positive momentum leading to a consolidation in the daily time frame. Intraday Support and Resistance, 77.20 and 78.70 respectively.

From the fundamental perspective, expectations for the US and China to be more committed to finding resolution to their trade dispute, becomes increasingly evident on both sides of the Pacific. This could burst further Yen crosses.