- AUD/JPY rallied on Tuesday as the Aussie benefitted from risk-on flows, rising commodity prices and strong domestic data.
- The pair hit fresh weekly highs at 93.80 and bulls are eyeing a test of annual highs above 94.00.
A significant improvement in the market’s appetite for risk which has seen US and global equity markets turn higher in wake of the latest not as hot as feared US inflation figures has given the Aussie in recent trade. AUD/JPY recently pushed to a fresh weekly high to the north of Monday’s highs in the 93.60s to briefly touch 93.80.
At current levels in the 93.60s, it trades with gains of around 0.7%, having already seen a healthy rebound from earlier session sub-93.00 lows, with the Aussie benefitting from strength across global commodity markets and in the afterglow of strong business survey data released during the Asia Pacific session.
For reference, NAB’s Business Conditions index in March jumped to 18 from 9 in February, its highest since July 2021, while the Business Confidence index rose to 16 from 13. The improvement in risk appetite and upside in commodity prices has got some bulls eyeing a breakout above recent highs just above 94.00.
Indeed, looking at AUD/JPY price action over the last few weeks, it does seem to be forming an ascending triangle, which typically signals an upcoming bullish breakout. But a downturn in yields in the US in wake of the latest inflation report is offering the yen some respite.
For AUD/JPY to break above 94.00 and hit fresh year-to-date highs, yields may have to regain some of their recent upside bias, alongside a continuation of the current more risk-friendly flows in equities and commodities. Domestic Australian fundamentals could also be a catalyst for upside; the March labour market report is out during Thursday’s Asia Pacific session and, if sufficiently strong, could further boost conviction that the RBA will begin hiking by the end of H2 2022.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended content
Editors’ Picks
AUD/USD posts gain, yet dive below 0.6500 amid Aussie CPI, ahead of US GDP
The Aussie Dollar finished Wednesday’s session with decent gains of 0.15% against the US Dollar, yet it retreated from weekly highs of 0.6529, which it hit after a hotter-than-expected inflation report. As the Asian session begins, the AUD/USD trades around 0.6495.
USD/JPY finds its highest bids since 1990, approaches 156.00
USD/JPY broke into its highest chart territory since June of 1990 on Wednesday, peaking near 155.40 for the first time in 34 years as the Japanese Yen continues to tumble across the broad FX market.
Gold stays firm amid higher US yields as traders await US GDP data
Gold recovers from recent losses, buoyed by market interest despite a stronger US Dollar and higher US Treasury yields. De-escalation of Middle East tensions contributed to increased market stability, denting the appetite for Gold buying.
Ethereum suffers slight pullback, Hong Kong spot ETH ETFs to begin trading on April 30
Ethereum suffered a brief decline on Wednesday afternoon despite increased accumulation from whales. This follows Ethereum restaking protocol Renzo restaked ETH crashing from its 1:1 peg with ETH and increased activities surrounding spot Ethereum ETFs.
Dow Jones Industrial Average hesitates on Wednesday as markets wait for key US data
The DJIA stumbled on Wednesday, falling from recent highs near 38,550.00 as investors ease off of Tuesday’s risk appetite. The index recovered as US data continues to vex financial markets that remain overwhelmingly focused on rate cuts from the US Fed.