At the time of writing, AUD/JPY is the top mover for today. But it’s actually a very tight race. Rightfully, in a day when risk aversion dominates, AUD/JPY’s weakness is natural.
To put it into perspective, DOW hit as low as 24421.05 in initial trading. After a weak recovery, it’s down -1.92% at 24539. It looks like DOW could have a take on 24000 handle before the week ends.
AUD/JPY’s failure to sustain above 38.2% retracement of 90.29 to 78.65 at 83.02 raises serious doubt over the bullish scenario as discussed in a prior post here. If AUD/JPY has completed a double bottom reversal pattern (78.67, 78.56), the move after taking out 82.50 should be powerful. That’s not what we’ve seen. And, focus is now back on 81.24 minor support. Break should confirm the rejection by 83.02 fibonacci level. Also, that would mark rejection by 55 week EMA. And, medium term bearishness would be retained and retest of 78.56 low should be seen next.
However, if AUD/JPY can defend 81.24 minor support. Firm break of 83.02 should confirm medium term reversal. Further rise should at least be seen to 61.8% retracement of 90.29 to 78.65 at 85.79. We’ll see how it goes within a day or two, or even within hours.
