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AUD/JPY: Heavier offers 97.00+ disallow further progress

FXStreet (Bali) - AUD/JPY is pivoting directionless around the 97.00 whole number, after being nudged lower during a flash flight to safety on Thursday, only to rebound towards 97.20 recent highs, carving out its current intraday range from 97.25 to 96.80.

Technically, the range-bound conditions develop engulfed by a broader uptrend context, initiated since a major bottom was found around 94.00 last Aug 7, with the rate initiating a 3 cents run higher, although the stage of the bull run commences to feel like a bit top heavy, and any pick up in geo-political risks may cause some severe damage to those still holding longs.

For now though, the Aussie keep hanging in there, being the second best performer in recent weeks, only behind the USD, while in the Japanese Yen space, there is a sense that the market might be gearing up for some wilder moves to weaken the currency in the weeks/months to come, judging by both price action and potential major catalysts such as GPIF re-allocation into riskier assets or even fresh QQE measures by BoJ's Kuroda & Co. given recent low levels in the country's exports as well as housing spending (big disappointment today), which may limit progress in the inflation front.

Trades should be watchful on a potential break of the range, which should determine the next short term direction, either towards 97.50 (round and semi-round numbers tend to have a special magnet effect in Yen crosses) or 96.50.

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