AUD/JPY touches its lowest level since November 2016
Are the wheels starting to come off for yen pairs? As mentioned earlier, AUD/JPY and USD/JPY are threatening breaks of two key levels and right now we’re starting to see those levels give way. Against the yen, commodity currencies are faring the poorest today as risk sentiment continues to wane in markets. AUD/JPY is now down by 1.2% on the day.
The move higher in the yen (lower in yen pairs) coincides with US equity futures trading back to the lows for the day:
With AUD/JPY on the verge of running away to the downside now, it’s going to only exacerbate the negativity and pessimism in markets that we’re seeing so far today. That doesn’t bode well for risk sentiment in the session ahead as well.
Aside from AUD/JPY, look out for a run lower in USD/JPY as highlighted earlier too. The upwards trendline has been key to stem declines so far but if risk deteriorates further, it’s only a matter of time before the pair starts succumbing to a broader move to the downside.