AUDJPY bounces sharply higher today
The AUDJPY is having its best up day going back to June 2016. The pair has soared 2.85% (it did reach over 3.06% at the highs) on the day. Back in June of 2016, the pair had its largest most recent up day of 3.78%.
The gains today were helped by news that China would allow four firms to resume coal imports from Australia. That helped the AUD move higher vs all the major currencies.
From the JPY side, consistent USDJPY buying – and overall JPY weakness – has the AUDJPY as the biggest mover on the day.
The USDJPY from a technical perspective moved above its 200 hour MA at 132.23 today, and tested the 50% midpoint of the 2022 trading range at 132.70. The high price reached 132.705 so far (currently trades at 132.42 after testing that 50% target).
Technically for the AUDJPY, the pair reached a low yesterday at 87.41. That was short of the December low at 87.01 (which was the lowest level going back to May 12, 2022 – see daily chart above).
If the price was to continue to go lower, getting below the December low and the lows from May would have been needed to increase the bearish bias (IF the sellers were to take more control).The price decline could not do that, and that failure started the move back to the upside.
Today, the momentum got started and the price has trended higher and higher, helped by the fundamental news from China.
Drilling to the hourly chart below, the run to the upside today has not seen much in the way of corrections. The pair gathered momentum on the break of the 100/200 hour MAs (blue and green lines at 89.19 and 89.41 respectively).
However, as the pair approached the next key target at recent swing lows and highs near 91.056 and the 61.8% of the most recent move lower at 90.93 (see red numbered circles on the chart below), sellers have entered and have slowed the rise (the high reached 90.88).
With the USDJPY reaching a key topside target as well, perhaps it is time to look for a correction lower
Risk for sellers against the upside target is a move above the 91.056 level. Move above that level, and the trend is still your friend in this pair.
AUDJPY on the hourly chart