The AUD/JPY saw a strong surge in risk appetite emerge early yesterday and the forex pair has sustained plenty of its higher value.
The AUD/JPY saw an abrupt spike higher yesterday in early forex action as financial houses responded to US election clarity and became optimistic. Risk takers will likely look at the results of yesterday’s price action and wonder if the momentum can be sustained. Interestingly, the AUD/JPY has been able to sustain plenty of the ground it advanced on Monday, and this may indicate the forex pair will now reestablish its current price band as equilibrium in order to create higher values.
From late August until the middle of September, the AUD/JPY saw price action between 76.400 and 78.100 as the forex pair attempted to test highs not seen since April of 2019. The AUD/JPY has certainly been able to rebound well from the dark days of coronavirus risk implications when adverse trading ruled the sphere in the middle of March ,when the forex pair was trading near 64.200.
Since those low water marks seen in March, the AUD/JPY has been able to reignite solid upwards movement as optimism began to resurface in financial institutions. On October the 9th the forex pair was trading near the 76.500 level when negative sentiment began to create bearish momentum and pushed the AUD/JPY to lows in early November around the 73.100 juncture. Can we blame worries about the US elections for this reaction?
However, as optimism has begun to seep into the market place the AUD/JPY certainly has seen an incremental bullish trend emerge again. Yesterday’s trading took the forex pair from a price vicinity of nearly 75.400 to above 77.000 quickly. The question speculators need to consider is if the current price ratios of the AUD/JPY will sustain its value and use this as a place to try to create further bullish momentum which will eventually test late August highs near the 78.000 level.
Buying the AUD/JPY on dips and looking for reversals higher near term may be a worthwhile trading opportunity for speculators. A large amount of risk appetite came into the global markets yesterday and traders suspect financial assets may need a day to rest. However, momentum is clearly on the side of bullish sentiment and speculators may want to pursue buying positions of the AUD/JPY using limit orders to try to take advantage of an upwards trend, which may continue to develop near term.
AUD/JPY Short Term Outlook:
Current Resistance: 76.750
Current Support: 76.340
High Target: 77.190
Low Target: 76.100