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AUD/JPY a buy on dips opportunity?

FXStreet (Guatemala) - AUD/JPY is trading at 101.47, down -0.37% on the day, having posted a daily high at 102.43 and low at 101.25.

AUD/JPY is holding the mid range of the 101 handle with markets that have had a chance to digest Asia’s volatility on the back of the positioning of the greenback sparked by Japans GDP results and profits taken off the table from longer term long positions in the USD/JPY. The cross remains within highly positive territory.

The Aussie has an element of support due to finalizations of a 10 year awaited free trade agreement between China and Australia that should be signed in the new-year and implemented between then and 2019 where tariffs of 95% of Australian products will be removed for Chinese importers. The currency exchange will not require the USD as a vehicle, but AUD/CNY will be traded freely.

Also, supporting the cross, is the very idea that there will be continued supporting measure to the Japanese economy battling to ensure liquidity in the domestic economy which is likely to continue weighing on the local currency. Further delays in the sales tax hike should underpin the Yen crosses and lower prices might be opportunities to sell the Japanese currency and buy the crosses on dips.

AUD/JPY noteworthy levels

Spot is presently trading at 101.48, and next resistance can be seen at 101.51 (Hourly 20 EMA), 101.52 (Daily Classic PP) and 101.85. Next support to the downside can be found at 101.25, 101.11 (Daily Classic S1), 100.95 (Hourly 100 SMA), 100.91 and 100.86 (Weekly Classic PP).

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