AUD/JPY: Recovery stalls at daily pivot, risk-off at full steam

Dhwani Mehta FXStreet

The ongoing recovery in the AUD/JPY cross ran into offers at daily pivot, as risk-off trades got refueled amid European stocks sell-off and fears over Trump’s protectionism.

AUD/JPY holds above most major DMAs

The AUD/JPY pair drops -0.35% to 86.58, having paused the recovery mode from 86.30 levels. The cross remains in the red as demand for the safe-haven yen remains on the rise amid a classic risk-off market profile, as reflected by rallying CBOE Volatility Index (VIX) futures (up +5.67%), popularly known as a fear gauge.

While the AUD/USD pair remains confined in a narrow range, lending little support to the recovery in AUD/JPY. A fresh wave of risk-aversion gripped Europe after the European traders fretted Trump’s immigration curbs and assessed its implications on the world trade, which shattered investors’ confidence across the financial markets.

Technical Levels

Higher side: 87.17 (Dec 16 high), 87.50 (psychological levels)

Lower side: 86.20 (daily S3), 85.48 (50-DMA)

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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