AUD/JPY clocks fresh 2-1/2 month high on Yen selling

The uptick in the treasury yields and the resulting sell-off in the Japanese Yen, pushed the AUD/JPY cross higher to 84.88 this Tuesday morning; its highest level since April 3. 

The 10-year treasury yield jumped from 2.139% to 2.198% on Monday on Fed’s Dudley’s hawkish take on the economy. The Dollar-Yen pair, which closely follows the long duration treasury yields, rose to 11.60 and extended gains in the Asian session today to 111.77 levels. 

Meanwhile, the AUD/USD is relatively resilient; now trading marginally lower on the day below 0.76 handle. Thus, the AUD/JPY cross remains is well bid and was last seen trading around 84.77 levels. 

Focus on RBA minutes

Economists will pour over the RBA minutes of the June board meeting due for release today at 01:30 GMT. The central bank, at its June meeting, left the interest rates unchanged at a record low of 1.5%.  Also scheduled for release at 01:30 GMT are Australia Q1 figures for house prices, with forecasts suggesting an increase of 2.2% on quarter and 8.9 % year-on-year. 

AUD/JPY Technical Levels

A break above 85.19 (Jan 31 low + 61.8% Fib R of Mar high - Apr low) would open up upside towards 85.77 (Mar 31 high) and 86.00 (zero levels). On the other hand, a break below 84.66 (session low) and 84.49 (50% Fib R of Mar high - Apr low) would expose support at 84.02 (Apr 26 high) and 83.73 (May 24 high). 
Note - Risk of a bearish price RSI divergence on the 4-hour chart. 

  TREND INDEX OB/OS INDEX VOLATILY INDEX
15M Bearish Neutral Shrinking
1H Bearish Overbought Expanding
4H Bullish Overbought Low
1D Bullish Overbought Expanding
1W Bearish Neutral Shrinking

 

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