I've been watching $AUDJPY and $AUDUSD recently and the 50%, 61.8% retracement levels. My post a few months ago retraced $AUDJPY from it's 2008 highs to see a correction which filled at 70ish (
6/22 Post). Now I'm looking at AUDJPY's 50% retracement level from the 2007 peak. $AUDJPY pierced above resistance but could not hold 80. It might need jumper
cables again. If the Baltic Dry Index doesn't rally back here and China and commodities sell off, AUD could take a hit IMO, thoughts? AUDJPY is part of the global reflation, risk appetite and commodity trade, however interest rate differentials and inflation data are also important. If Japan sees
deflationary pressures while Australia sees
inflationary pressures, money could keep flowing to the $AUD based on interest rate speculation. But when will that trade be priced in and/or the
yield gap peak (article looks at AUDUSD)? We'll see what happens with the Aussie. Read the articles below for more info on what is driving the currency pair.
AUDJPY (Fxstreet.com)
The AUDUSD retraced 61.8% of it's losses from the 2008 peak.
AUDUSD (Fxstreet.com)
The FXA (Rydex CurrencyShares Australian Dollar ETF) can also be utilized for the AUD/USD pair. It closed at $83.07 on Friday.
Recent articles:
Japan 10-Year Yields at Lowest Level This Month on Rate Policy (Bloomberg)
Stevens Says RBA May Raise Rate From Emergency Level (Bloomberg)
Australian Dollar’s Rally May Wane as Yield Gap Peaks, RBS Says (Bloomberg)
Australian iron ore stocks in China down 9 pct in mth (Reuters)
Australian Dollar May Drop 9% to 73 Yen This Month, RBC Says (Bloomberg)
Yen Gains Amid Speculation Japan Investors Bringing Back Funds (Bloomberg)
Stevens Says Strong Australia Economy to Shrink Budget Deficit (Bloomberg)
Forex: Yen rises as investors assess risk tolerance (Reuters)
