AUD/JPY hits 7.5-week low amid weak tone in stocks

AUD/JPY dropped to the lowest level since Feb. 8 a few minutes before press time, having created a bearish candle on Friday.
The S&P 500 futures are down 0.5 percent at press time and could be pushing the anti-risk JPY higher.

Omkar Godbole FXStreet Contributor

The AUD/JPY pair is currently trading at 77.66, having hit a 7.5-week low of 77.54 earlier today.

The anti-risk Japanese yen has likely picked up a bid, tracking the risk aversion in the financial markets. As of writing, the futures on the S&P 500 are down 0.5 percent and Japan's Nikkei index is reporting a 3 percent drop. Other major Asian indices like the S&P/ASX 200, Hang Seng, and the Shanghai Composite are also flashing red.

Looking forward, the pair may print three-month lows below 77.44 if the flight to safety gathers pace and the Chinese yuan extends losses. The USD/CNH pair is currently trading at 6.7255, having hit a ten-day high of 6.7307 soon before press time.

Technically speaking, AUD/JPY looks set for a deeper drop, having charted a bearish marubozu candle on Friday. The 5- and 10-day moving averages (MAs) are also trending south and the 14-day relative strength index reporting bearish conditions with a below-50 print.

Technical Levels

Resistance: 77.78 (Friday's low), 77.98 (Asian session high), 78.39 (5-day MA)

Support: 77.44 (Feb. 8 low), 77.0 (psychological level), 76.78 (November 2016)

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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