AUDJPY Bearish Equities Support The Drop

Nenad Kerkez

I have explained it many times during webinars- AUDJPY is a great pair to trade in correlation with equities. Today we have a risk off sentiment as 29 of the 30 Germany DAX companies are down in price. That is reflecting on Yen pairs. Basically, when its risk-on environment, commodities prices tend to increase, and traders go long AUD due to that factor. When commodities prices go up, stock Markets go up and there is demand for positive swaps on AUD pairs currently as opposed to JPY. When its a risk-off environment, usually the opposite occurs, and as a result, the JPY appreciates as foreign flows from Japan are repatriated back to their local currency.

AUDJPY is going down. There are 2 possible scenarios. POC positional trade or Breakout trade. POC comes in 80.90-81.00 zone (H3, DPP, trend line, EMA89) coupled with now moment sellers should reject the price if we see a retracement. However if there is no retracement a momentum break or h1/h4 close below 80.00 should tank the pair down to its target and that is 79.60

AUDJPY Hourly Chart

AUDJPY Hourly Chart