Aussie picking up steam against the Japanese Yen?

Recent macroeconomic data surrounding the Australian Dollar, Aussie has been mixed. Although the expected policy adjustment by the Reserve Bank of Australia is a rate hike, there is no rush to raise interest rates currently. Phillip Lowe, the RBA’s governor announced yesterday that there is “no strong case for a near-term policy adjustment. The geopolitical tension between the USA and China can leave the AUD exposed to a significant fundamental risk as China is a major trade partner with Australia.

That been said, traders should be weary and cautious in their move on the Aussie. Technically, given the state of the Japanese Yen, a good place to buy the Aussie would be the AUD/JPY – after a short-term surge upwards, price is currently trading at a confluence zone of support – possibly printing a higher low following the uptrend channel from the 2nd of April [ see H1 Chart]. If this area of support holds, our next plausible target is the recent near-term resistance zone at the 83.380 price area.

Fig 1: Hourly (H1) AUD/JPY Chart

AUD/JPY

Buy @ current market price (instant execution)

Stop Loss: 82.405

Take Profit 1: 83.385

Take Profit 2: 84.00

 Conversely, significant fundamental risk as a result of a Global trade war  can cause price depreciation in the AUD/JPY.

Traders are advised to always use a stop loss!!

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