Market Spotlight: AUDJPY Trend Line Break

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AUDJPY Very Reversal AUDJPY has experienced a sharp change in sentiment over the past few weeks. After the breakout to fresh 2022 highs in mid-September, the pair has now collapsed and is trading down from around 98.80s to 92.20s currently. The reversal comes amid a heavy wave of risk aversion sweeping through markets, which is fueling safe-haven demand for JPY and seeing risk-linked FX return quickly. The pair has now broken below the local rising trend line and latest structural support at the 92.66 level. While below here, bears can stay short for 90.52 initially and 88.02 later. The retail market is strongly buying the pair, suggesting plenty of room for a further drop. Keep an Eye The current market backdrop of business risk is what is driving this sell off. With USD breaking fresh highs, bond yields soaring and JPY soaking safe-haven demand, the stage is set for further losses. Therefore, traders should look to stay short while the dynamics continue, managing risk if we see any change in this story. Another round of Fed speakers today (including Powell) will likely drive USD higher.

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