AUD/JPY: markets risk barometer signals that there could be trouble ahead

AUD/JPY: up to test the 50-D SMA but struggles as risk turns sour.
AUD/JPY: Trump and Russia butting heads over Syria causing a flight to safety.

Ross J Burland FXStreet

The markets risk barometer, AUD/JPY, has been capped as risk turns sour again on the geopolitical front, this time with the focus away from trade wars to actual war where the tension in the ME is heating up again and markets are starting to pay attention. Currently, AUD/JPY is trading at 82.99, down -0.26% on the day, having posted a daily high at 83.30 and low at 82.67.

AUD/JPY has rallied to the daily descending trendline resistance but is once again struggling here meeting the 50-D SMA as headlines have been crossing where Trump and Russia are butting heads over Syria.

Trump administration has been working to marshal international support for a possible military strike against Syrian President Bashar al-Assad for an alleged chemical-weapons attack, a move that is rubbing the Russians up the wrong way who have warned and pleaded the US to refrain from military intervention or be prepared for retaliation.

"I would once again beseech you to refrain from the plans that you're currently developing," Moscow's UN envoy Vasily Nebenzia said on Tuesday.

He warned Washington that it will "bear responsibility" for any "illegal military adventure" it carries out.

President Donald Trump tweeted today that the relationship with Russia“is worse now than it has ever been, and that includes the Cold War":

Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!

Risk-off play is on the rise with a big spike in gold and WTI making fresh YTD highs. However, stocks are climbing, (lead by tech stocks), and that is making for higher US yields, (US 10yrs -0.52% but at 2.7863%, up from 2.7534% low and below 2.8027% high) for now.

AUD/JPY levels

AUD/JPY is now making tracks to a 4-hr resistance level at 83.30, a previous low and high in Feb and March. RSI is on the rise and momentum is picking up again. The daily stick's indicators are leaning bullish as well with the price testing the aforementioned 50-D SMA and channel resistance. 84.30 is the next big level on the upside ahead of 84.50. To the downside, the 21-D SMA is located at 81.98

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.

EUR/USD holds losses below 1.1850 ahead of FOMC Minutes

EUR/USD stays on the back foot below 1.1850 in the European session on Wednesday, pressured by renewed US Dollar demand and reports that ECB President Lagarde will step down before the end of her term. Traders now look forward to the Minutes of the Fed's January monetary policy meeting for fresh signals on future rate cuts.

GBP/USD defends 1.3550 after UK inflation data

GBP/USD is holding above 1.3550 in Wednesday's European morning, little changed following the UK Consumer Price Index (CPI) data release. The UK inflation eased as expected in January, reaffirming bets for a March BoE interest rate cut, especially after Tuesday's weak employment report.

Gold retains bullish bias amid Fed rate cut bets, ahead of Fed Minutes

Gold sticks to modest intraday gains through the early European session, reversing a major part of the previous day's heavy losses of more than 2%, to the $4,843-4,842 region or a nearly two-week low. That said, the fundamental backdrop warrants caution for bulls ahead of the FOMC Minutes, which will look for more cues about the US Federal Reserve's rate-cut path.

Pi Network rally defies market pressure ahead of its first anniversary

Pi Network is trading above $0.1900 at press time on Wednesday, extending the weekly gains by nearly 8% so far. The steady recovery is supported by a short-term pause in mainnet migration, which reduces pressure on the PI token supply for Centralized Exchanges. The technical outlook focuses on the $0.1919 resistance as bullish momentum increases.

Mixed UK inflation data no gamechanger for the Bank of England

Food inflation plunged in January, but service sector price pressure is proving stickier. We continue to expect Bank of England rate cuts in March and June. The latest UK inflation read is a mixed bag for the Bank of England, but we doubt it drastically changes the odds of a March rate cut.

Top 3 Price Prediction: Bitcoin, Ethereum, and Ripple face downside risk as bears regain control

Bitcoin, Ethereum, and Ripple remain under pressure on Wednesday, with the broader trend still sideways. BTC is edging below $68,000, nearing the lower consolidating boundary, while ETH and XRP also declined slightly, approaching their key supports.