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28 Aug 2013
AUD/JPY clobbered Tuesday and early Wednesday on flight-to-safety trade
FXstreet.com (Barcelona) - The AUD/JPY‘s decline Tuesday was the epitome of the “risk-off” or “flight-to-safety” trade. Traders sought out the perceived safety of the Yen while fleeing the perceived risk of the Aussie Dollar.
AUD/JPY will continue to reflect global risk appetite Wednesday
With only the Australian Construction Work Done numbers due out Wednesday (and no Japanese data due out), the AUD/JPY will likely continue to be utilized by global traders as a proxy for the “risk” trade. It is clear that managers who desire to hold onto their core holdings but who want to hedge their risk (given the Syria situation) are putting on short-positions in the AUD/JPY. The question is how much further they will cause the AUD/JPY to decline.
Technical outlook for AUD/JPY
Technicians point out that key support for AUD/JPY does not come into play until 86.39. If that support level holds up, expect another corrective move higher up to 90.12. Shorter-term resistance for AUD/JPY comes in at 87.67. If support at 86.39 fails to hold up, expect a continued move down to 85.32 to occur.
AUD/JPY will continue to reflect global risk appetite Wednesday
With only the Australian Construction Work Done numbers due out Wednesday (and no Japanese data due out), the AUD/JPY will likely continue to be utilized by global traders as a proxy for the “risk” trade. It is clear that managers who desire to hold onto their core holdings but who want to hedge their risk (given the Syria situation) are putting on short-positions in the AUD/JPY. The question is how much further they will cause the AUD/JPY to decline.
Technical outlook for AUD/JPY
Technicians point out that key support for AUD/JPY does not come into play until 86.39. If that support level holds up, expect another corrective move higher up to 90.12. Shorter-term resistance for AUD/JPY comes in at 87.67. If support at 86.39 fails to hold up, expect a continued move down to 85.32 to occur.