AUDJPY Breaks Lower
The AUDJPY short trade is developing well now with price having broken through the initial target at 80.69. With MACD and RSI both bearish here, there is room for a continuation lower with 79.57 the next downside target to note.
The breakdown in risk appetite this week has been a key driver of the trade with AUD selling off as risk assets seen an unwinding across portfolios. Meanwhile, JPY continues to derive steady safe haven inflow, a dynamic which looks set to continue in the near term, keeping the outlook for the pair skewed towards further declines.
Key Data to Watch
The RBA minutes overnight underscored the bank’s message that rates will not be lifting ahead of 2024. Additionally, fears of the economic impact from the new lockdowns in place are also causing concerns for the bank. With little in the way of key data for either economy this week, the outlook for the pair will remain tied to broader risk flows. If the current equities sell off deepens further, expect AUDJPY to continue lower for now.