Markets

ANZ's FX Insights: Risk/reward favours selling AUD/JPY (level, target & stop)

From ANZ's weekly 'FX Insight', a trade recommendation for AUD/JPY

(With thanks to Daniel Been and Martin Whetton)

In brief:

AUD/JPY: A TACTICAL SELL

  • The recent rally in AUD/JPY has largely been driven by a stronger USD/JPY and in the short term this strength is starting to look overdone
  • Profit taking by Japanese investors, a flatter curve in the US, or a rise in equity market volatility could all be catalysts for the reversal
  • Risk/reward favours selling AUD/JPY at 85.32 with a stop above the range high at 87.00 and a target of 80

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A little more:

  • In a recent note we upgraded our 2017 forecast forUSD/JPY to 115, which is not too far from the current level. As such, the move in the JPY is starting to look a touch extended to us. Given this, the relative performance of the AUD/USD compared to the USD/JPY means that AUD/JPY downside is increasingly likely.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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