AUD/JPY: bears eye 200 ema below 84 handle

Ross J Burland FXStreet

Currently, AUD/JPY is trading at 84.71, up 0.10% on the day, having posted a daily high at 84.76 and low at 84.59.

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AUD/JPY continues to trade in a phase of consolidation and below the 84.80 level. There was a double bounce just below 84.50 and the market remains directionless as we now head towards the closing sessions for the week. The cross has been under pressure with dollar weakness and the yen picking up the save haven demand while commodities have been a let down for the Aussie.

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Iron ore has been a weight and indeed the commodity currency has been the worst performer of the G10's this week. Subsequently, AUD/JPY dropped from space on the 87 handle and remains under pressure. However, analysts at Scotiabank explained that JPY is now trading well above levels implied by yield spreads and appears vulnerable to a downward adjustment in the event of a shift in the broader tone.

AUD/USD Intermarket: iron ore correlation a negative risk on the week

AUD/JPY levels

AUD/JPY's sell-off triggered stops through key supporting areas at 86.20, 85.80, 85.20 and the 85.00 level. These are all subsequent resistance levels on a correction hunting down the 87 handle again. On a continuation of the downside, the 200 daily ema is located at 83.76 and just below the 87.80 psychological support level while 82.50 has been a previous target and key resistance in 2016.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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