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AUD/JPY – Will Double Bottom Hold?
Its been a few weeks since we checked in with AUD/JPY and the pair is once again testing the double bottom at the 78.00 figure. The recent reversal in USD/JPY has really taken the toll on the cross but the failure of Aussie to break out above the .7300 figure has also hurt the longs.
Tomorrow is setting up as a seminal day for the pair with NFP looming large on the market. A weak number would once again put in doubt the prospect of a June or July hike and could send USD/JPY below its range lows at 108.00 which would drag AUD/JPY below 78.00. The Aussie itself is unlikely to rally much under those conditions as weak US data would actually increase the odds of an RBA rate cut before the summer’s end.
Only a very strong NFP data point could reverse the recent flows and create a V-shaped rebound that could take the pair back towards the 80.00 handle. Barring that turn of events the momentum in the pair is clearly down and the prospect of a break below range support remains high.