AUDJPY has come a long way since the late 2008-09
commodity crush. The Australian Dollar is a commodity currency and is imported by China to purchase Aussie goods. When traders have appetite for risk they can utilize the AUDJPY (Australian Dollar/Japanese Yen) carry trade where they borrow cheap yen to buy higher yielding Australian dollars/assets. When this trade gets overextended AUDJPY sells off and these days it's coupled with commodities and risky assets. AUDJPY hit the 50% retracement level a few days ago and is selling off (2007 highs to 2008 lows). It also broke through 80 support. If the reflation trade (RFLA) reprices here, AUDJPY would follow suit IMO.. The reflation trade needs
jumper cables part 2.
Other posts re: AUDJPY:
AUDJPY Hit Retracement Level, Needs Reflation Jumper Cables (6/22)
Currencies, Copper Prices Waiting for Results of Recovery Bill (2/10)
Reflation Trade Analysis. Recent Action in Gold, USD, OIL, AUD/JPY (12/31)
*Made an update an 2 hours before the FOMC announcement
here. Rallied through 80.
