Market Spotlight: AUDJPY Looking To Breakout?

AUDJPY Bull FlagAUDJPY price action looks interesting here. After the latest peak in June, AUDJPY corrected lower within a bearish channel, which can be seen as a bull flag within the longer-term bull trend. With price well supported into the lows and now turning higher again, the risks of a top breakout are growing. Bulls may look for a break of the 95.67 internal highs targeting a move through YTD highs and up to 98.83 initially. More conservative bulls can wait for a break from YTD highs. Retail market is currently around 80% type, reflecting plenty of scope for a fresh breakout here. Keep an Eye The broader risk backdrop we saw this week helped lift AUD while weakening JPY on reduced safe-haven inflows. As long as this dynamic continues, we can expect the pair to continue higher in the near term. With that in mind, today’s Jackson Hole event is the key. If traders sense any dovishness from Powell, most likely regarding next year’s outlook, then USD is likely to emerge and risk markets will move higher, supporting AUDJPY.

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