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Forex: AUD/JPY plummets as risk appetite fades

FXstreet.com (Barcelona) - The AUD/JPY suffered steep losses today, dropping 3.13% and closing the US session at 99.63. At one point the pair traded as low as 98.74 before stabilizing and drifting slightly higher at the end of the day. Market participants should be aware of the RBA Minutes release later in the session at 1:30 GMT.

According to Sean Lee of FXWW “AUD/JPY fell very heavily due to a perfect storm of bearish factors; an overly long market, poor Chinese data, the US Treasury comments and generally increased risk aversion. The close below 100.00 is another bearish technical factor and support levels are at 97.00 and 95.50. I would not try catching the falling knife just yet and bulls are best to wait until the dust settles a bit more.”

The FXStreet.com Trend Index remains slightly bearish on the 4hr chart, while the OB/OS Index reads Oversold. First support comes in at 98.73 (bullish hammer candle on 1 hour chart), followed by 98.32 (the 45 DMA on daily chart). Initial resistance is 100.32 (the 9 DMA on hourly), followed by 101.25 (the 20 DMA on hourly).

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