AUD/JPY is currently the top mover for today, down over -1.6%. Australian Dollar is knocked down by comments from RBA Governor Philip Lowe. Meanwhile, Yen is lifted by falling global treasury yields. Yen crosses also generally display signs of bearish reversal.

Back to AUD/JPY, current development argues that corrective rebound from 70.27 flash crash low has completed at 79.84 already. This is supported by mild bearish divergence condition in 4 hour MACD, as well as rejection by 55 day EMA. Focus is now on 77.51 support. Break there will confirm this bearish case.

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As the 70.27 is an abnormal spike low, it’s hard to judge whether it would be taken out in near term at this point. The momentum through 77.51 should be watched to assess the chance. But in any case, risk will now stay on the downside as long as 79.84 holds, even in case of strong recovery.


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