Follow up on the quick comment here. Our AUD/JPY short was stopped out at break even (80.25) as the cross rebounded to as high as 80.79. A couple of factor went against the trade. The main one is definitely the chance to restart US-China trade negotiation. AUD/JPY initially hesitated a bit after breaking 4 hour 55 EMA. And even stronger than expected Australian employment data couldn’t build sustained momentum.
But then buyers finally committed after China confirmed that they received US invitation for trade talk. Then, risk appetite were further boosted by Turkish central bank CBRT’s rate massive rate hike, as well as weaker than expected US core inflation reading.
Technically, while 78.67 should be a short term bottom, there is no confirmation in trend reversal as long as 81.78 resistance holds. That is, down trend from 90.29 is in favor to resume later to 61.8% projection of 90.29 to 80.48 from 83.92 at 77.85. We’ll wait and see if there is another opportunity to trade this one.
