- AUD / USD has fallen below 83.00 as risk assets experience technical corrections more broadly and after encountering resistance at 83.50.
- But the pair may find decent buying interest on dips above its 50 and 100 DMAs which would bode well for the bulls.
The AUD/JPY It has fallen from previous session highs near the 83.50 level to fall back below 83.00 in recent trading as traders profit from recent risk asset bets. Equities and crude oil have also pulled back from the highs of the previous session as markets undergo a modest technical correction following recent risk-driven moves.
While the AUD / JPY is now trading around 0.2% lower on the session, the pair continues to trade with weekly gains of almost 0.5% and is still well above 3.0% versus lows below 80.50 on the last Monday. Remember that risk assets like the Australian dollar have risen and safe haven assets like the yen have suffered in recent days as Omicron fears have subsided. The AUD has also had an added boost of strength in base metals and optimism that the Chinese authorities will step in with more support for economic growth in 2022.
For now, the AUD / JPY appears to be finding some support just above its 50-day moving average at 82.85. If that level is lost, there is much more support near the downside in the form of the 200 DMA at 82.60 and a major break-even area (which has recently functioned as resistance and later support) around 82.50. An uptrend has been limiting price action for AUD / JPY for the past few weeks and technical selling, as the pair failed to break above this trend line early in the session, probably has something to do with the recent pullback since the maximums.
But that doesn’t mean that AUD / JPY’s recent bullish streak is over. If the pair can find good buying interest on the dips and remain supported above the 50 and 200 DMA, that bodes well that a move back towards 83.50 is in the cards. But techies should know that for the remainder of the week, forex markets may struggle to trade with much conviction, as many market participants in Australia, Europe and the US will be absent for the Christmas / Year celebrations. New.
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