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AUD/JPY holding above double 87.25 low ahead of RBA

FXstreet.com (Barcelona) - The AUD/JPY foreign exchange cross rate is last trading at 87.53, off recent session and weekly lows 87.25, bouncing on the back of Aussie strength, despite current Yen strength against the USD, just few hours away from the RBA meeting at 04:30 GMT.

AUD/JPY more downside available

“After consolidating for two months, the Aussie has resumed its downtrend and the second leg of that by recently taking out the 88.93 level,” said founder at 2ndSkiesForex, Chris Capre, adding: “It then confirmed it as a key role reversal level as it pulled right back to it, then sold off another +150 pips since. It is possible the pair could test it again, so we'll look to sell on pullbacks into the level, targeting 87.45 and 85.30 as there is a lot more downside available.”

AUD/JPY key technical levels

Immediate support to the downside for AUD/JPY lies at recent session and August's 01 2013 lows 87.25/23, followed by Dec 07 2012 highs at 86.72, and Nov 26 2012 highs at 86.44 . To the upside, closest resistance shows at current levels as yesterday's lows 87.50, followed by Friday's lows at 87.90, and early NY session highs at 88.04.

Flash: Look to establish a long USD/JPY position - RBS

Recent strength in the Japanese Yen is not consistent with a recent ebbing in confidence in Japan, notes Greg Gibbs, FX Strategist for RBS.
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Flash: AUD to suffer limited damage on RBA cut, may squeeze higher - Westpac

Chances of the RBA cutting rates today by 25bp to 2.50% are being priced at 103%, leaving most interest in the tone of the accompanying statement, which will be published at 4.30GMT, notes FX Strategist Sean Callow.
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