AUD/JPY Turns Lower At The Top Of Its Range
Matt Simpson April 7, 2019 9:37 PM
Interestingly, AUD/JPY has hit resistance at the top of its range just as the US10Y and US2Y have hit resistance levels. Given they both remain within a downtrend and, like AUD/JPY, are considered a barometer of risk, then we see potential for sentiment to turn lower. That said, if we see US yields break higher then it leaves the potential for AUD/JPY to also break higher in tandem and out of rage. Therefore, it could pay to watch yields in tandem with AUD/JPY at this potentially pivotal moment for risk.
AUD/JPY is currently trading lower for the session after printing a bearish pinbar on Friday. Furthermore, the stochastic oscillator is overbought territory and on the verge of providing a bearish sell-signal. With the market ranging, conditions are ideal for oscillators which tend to provide more false signals during a strong trend. If the range holds and sentiment turns lower, we could well see AUD/JPY head back towards the February lows. Bears could look to fade into any retracement below 79.26 (Friday’s low) for a more attractive entry level. However, given the range is around 240 pips, it could also serve well to trade from the daily chart.
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