Market Spotlight: AUDJPY Breakdown Trade

AUDJPY Turning LowerThe heavy selling AUD this week, as a result of the fresh lockdown announcement there, has seen the Aussie weakening against a broad basket of currencies. Given the high-beta nature of the Aussie, the move has been more pronounced against safe haven currencies such as USD and JPY. With fears over the delta variant growing, the risk of further safe-haven strengthening of the Yen presents downside opportunities in AUDDJPY.The decline from the 85.43 level highs has seen price moving below the rising trend line and subsequently dropping below the 83.94 level to test support at 82.02. This is a big support level for the pair and with RSI and MACD both bearish here, the focus is on a further drop lower with a break of that level targeting 80.69 initially and 79.57 thereafter.Key Data to WatchBoth AUD and JPY have manufacturing data due this week. However, the pair is more likely to trade in closer alignment the general risk themes which have developed this week, keeping price geared towards further downside. The US labour reports at the top of the week could also be a downside catalyst for AUD on any upside surprise.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/market-spotlight-audjpy-breakdown-trade"
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