AUD/JPY touches a high of 82.05 on the day
And closes in on this week's high @ 82.11 posted on Monday trading. So far, the pair has failed to pull off a sustained break above the 82.00 handle in two previous attempts this week. With Asian equities extending gains further (Shanghai Composite now up 1.2%), will this be the fuel buyers need to push the pair higher?
The foundation for an upside move has been rather solid as buyers defended the 100-hour MA (red line) since overnight trading, thus maintaining the near-term bullish bias.
But a break of the 82.11 high and more specifically 82.12 needs to be observed for the next move higher in the pair. The 82.12 level is the 38.2 retracement in the recent downswing as seen here:
Following that, there will be resistance near 82.58 where the 50.0 retracement and the 100-day MA sits.
If stocks continue to rally during the day and Treasury yields nudge higher, I expect the pair to also rally further. But the real risk will come from any further escalation in the trade rhetoric, which seems like it's only a matter of time before it hits. If anything, this upside move here feels like a balloon that's just waiting to be popped right now.
