AUD/JPY screams ‘risk-off’

Omkar Godbole FXStreet Contributor

The risk-off tone seen earlier this month looks set to continue and probably worsen this week, given the AUD/JPY pair has dropped to a near three-month low of 84.06 this Monday morning.

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This is evident from the drop in the US dollar index and the strength in the safe haven Japanese Yen. Aussie dollar which has been a major beneficiary of the Trump-led rally in the commodities is now under pressure as well.

THus, the AUD/JPY cross is widely considered as a barometer of risk sentiment. The pair was last seen trading around 84.05 levels. The losses clearly point to worsening of the risk aversion during the day ahead.

S&P 500 futures are already down close to 0.80%, which is line with the sell-off in the AUD/JPY pair.

AUD/JPY Technical Levels

The daily ADX line has bottomed out and is now sloping higher, which indicates the bears are gaining strength. A break below 84.00 (zero figure) could yield 83.74 (Dec 29 low). A daily close below the same would attract fresh offers and take the pair down to sub-83.00 levels. On the higher side, key resistance levels are 84.96 (5-DMA) and 85.19 (50-DMA). Only a daily close above the 50-DMA would shift risk in favor of a technical correction to 85.85 (Mar 9 low).

	TREND INDEX	OB/OS INDEX	VOLATILY INDEX
15M	Bearish	Neutral	Shrinking
1H	Strongly Bearish	Neutral	High
4H	Bullish	Oversold	Low
1D	Bearish	Neutral	High
1W	Bullish	Overbought	Low
Updated Mar 26, 22:45 GMT

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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