AUD/JPY justifies its risk barometer status while flashing 0.16% intraday gains near Friday’s European session. The cross-currency pair prints 85.22 by the press time as sentiment-positive headlines challenge the previous risk-off mood. Among the key positives are the headlines concerning China’s troubled real-estate firm Evergrande. The Hong Kong-listed firm’s ability to pay a bond coupon and hopes of getting its assets sold, despite prior rejection from Hopson, challenge the risk aversion wave of late. Talking about data, Japan’s National CPI ex-Fresh Food prints 0.1% figure to register the first positive figure in 18 months while the Jibun Bank Manufacturing PMI for October also rose past 51.5 prior and 51.4 expected to 53.0. On the other hand, Australia’s Commonwealth Bank PMIs came in mixed for October due to weaker than expected Manufacturing PMI but Reserve Bank of Australia (RBA) Governor Philip Lowe kept citing inflation fears in his latest speech.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES : (TECHNICALS)

Technically speaking, after rising from the low of 78.85 made one month ago, the pair put paddle on accelerator and tested the yearly high at 86.02 in intraday session.  The bullish bias Moving Average Convergence Divergence (MACD) indicator fuels the probability of the next higher price movement toward the February, 2018 high at 88.12. Alternatively, if price reverses direction on profit booking it could retarced back to the 85.50 horizontal support level. Further, a break of the mentioned level, which coincides with the break of the ascending trendline from the low of 78.85 would mean more pain for the pair. The AUD/JPY bears would recapture the psychological 85.00 mark followed by Tuesday's low of 84.66.

AUDJPY Retreats From New Daily High

Oct 23 2021