AUD/JPY tests key near-term support as risk momentum called into question

Technical Analysis

AUD/JPY falls below its 100-hour moving average and is now testing the 200-hour moving average on the session

AUD/JPY H1 17-04
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The aussie has given back gains on the day against both the dollar and yen, as we see the risk momentum get called into question as oil prices hit the skids in European morning trade.

US futures have also seen its earlier advance pare back a little, with S&P 500 futures now up by around 2.5% after over 3% gains earlier. Still, the gains in the equities space remains solid with European stocks still holding between 2-3% gains currently.

But in the major currencies space, traders are less certain about the optimism as the dollar and yen are returning back to favour right now against the rest of the bloc.

For AUD/JPY, price is now testing the 200-hour MA (blue line) after breaking below the 100-hour MA (red line) earlier. A break below that will see sellers regain near-term control, eyeing a move towards near-term support around 67.58-70 next.

Sellers have been looking for a firm break below the 200-hour MA over the past few sessions but have found it tough to get below the support region above.

So far today, headlines have worked in favour of risk but even so, the market still has some doubts and is evident by the torn picture between currencies and equities right now.

Eventually, one side or the other has to be right so let’s see who will win the battle ahead of the weekend. For now, the dollar and yen are making a steady comeback and challenging key near-term levels, so don’t be too quick to rule them out just yet.

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