Crypto

The Australian dollar is sensitive because stocks and crypto methods favor the yen -by Ecork

Australian dollar, AUD/JPY analysis

  • The Japanese Yen is being offered as Crypto Sell and Risky Stocks
  • Downward revisions in global growth (mainly China) have major consequences for the Australian dollar
  • AUD/JPY Technical Levels

Try the yen with the sale of shares

The Japanese Yen is temporarily rising as the risk sentiment aligned with stocks and cryptocurrencies takes a hit. The recent altcoin debacle from Tether depegging extended to the stablecoin market as sympathy for Bitcoin and Ethereum plummeted. The Bank of Japan (BoJ) remains firm on its accommodative monetary policy although warnings of accelerating inflation and deteriorating household income are likely to challenge BoJ officials in the coming months.

On the other hand, the Australian dollar is down significantly from the highs reached in April, as the macroeconomic landscape veers away from strong global demand and strong demand for goods from China in particular. The Australian dollar continues to decline despite hawkish messages from Reserve Bank Governor Lowe that there were multiple hikes in interest rates after a 25 basis point rate hike in early May.

AUD/JPY Technical Levels

When markets are moving from one environment to another, it is best to minimize and identify key support and resistance right from the start. The Australian dollar was the currency of choice for the global recovery as commodity prices rose along with global demand (largely from China).

This landscape has changed drastically as Australia’s major trading partner, China has reimposed lockdowns in major cities in an effort to ease its no-virus policy. An undesirable byproduct of the shutdowns is reduced economic activity which also exacerbates existing supply chain shortages and shipping delays.

The monthly chart shows 3 loosely-like monthly candles evening star A candlestick pattern, though, is difficult to solidify as an extended upper wick complicates matters. However, the messages remain the same: the markets tried to push higher but ultimately failed to hold and fell too much. Since then, the pair has moved significantly lower, which warrants a closer look at the daily chart.

AUD/JPY monthly chart

Source: TradingView, prepared by Richard Snow

daily chart It shows a significant decline in today’s trading session, breaching the 90.50 resistance level. Today’s lower close may indicate 6 consecutive trading sessions of losses, which indicates that the current part of the bearish move may be due to a slight bounce in the upcoming sessions. The RSI is approaching oversold territory, supporting the possibility of a rise towards the 90.50 area – this time as resistance.

The bears may be looking for a rebound down from 90.50 to continue the decline as the fundamentals appear to support a downward movement in the AUD/JPY. Support comes in at 85.30 which is far from the current price. Resistance remains at 90.50 as a test of future higher levels for the pair.

AUD/JPY daily chart

AUD/JPY Price Forecast: AUD is sensitive as stocks and cryptocurrencies favor the yen

Source: TradingView, prepared by Richard Snow

Written by Richard Snow for DailyFX.com

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