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AUD/JPY Is the Bottom In?
The Aussie appears to have found a bottom over the past several weeks as the 8600 area has held despite the massive waves of risk aversion that befell the market. With Australian economic data relatively stable the market now has no fears that the RBA will lower rates any time in the near future while the decline in US rates has made trades question the prospect of any Fed tightening in the first half of 2015. Meanwhile USD/JPY has also found some footing after tumbling like a stone in last week’s market crash. Tonight however the pair will get its first test of the week as it faces the deluge of Chinese data. Most importantly the market is looking at Chinese GDP numbers which are slowing drifting towards the 7% mark. Although the market expects a print of 7.2% a print below 7% could really spook investors and send AUD/JPY for a retest of the lows at the 92.00 level.
Technically the spike bottom at 92.00 is the key support for the pair and a break there opens the floodgates for a run to 90.00 but a move above 94.50 would confirm that the bottom is in and that the pair is likely headed to 95.00