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  • AUD/JPY breaks a choppy range above 83.00 to the south.
  • Australia’s weekly Consumer Confidence eases, Japan eyes lifting the state of emergency for areas outside Tokyo.
  • Markets jostle between highest yields and hopes of US stimulus while waiting for US Fed Chair Powell.

AUD/JPY drops to 83.10 during its latest downside amid Tuesday’s Asian session. In doing so, the quote overcomes the recent choppy range surrounding 83.15-20. The pair recently ignored weekly consumer sentiment data from Australia but not news from Asahi suggesting Japan’s readiness to thrash virus-led emergency from Tokyo.

The quote jumped to the highest since December 2018 the previous day as market sentiment bolstered the coronavirus (COVID-19) vaccinations and unlock news from Israel and the UK.

Recently, Australia’s ANZ-Roy Morgan Australian Consumer Confidence dropped for the third consecutive week, to 109.02 versus 109.9 prior, but the quote paid a little heed to the news. However, Asahi news suggesting Japan’s plan to lift covid-led emergency from Tokyo seems to have helped the Japanese yen despite off in the Asian major.

It’s worth mentioning that the market’s cautious sentiment ahead of Federal Reserve Chairman Jerome Powell’s bi-annual testimony also weighs on the pair amid a lack of major data/events. The Fed Chair is mostly expected to reiterate his cautious optimism but any surprises can’t be ruled out considering the latest dovish comments from the ECB and mixed US data.

Read: The Week Ahead: Inflation and the Fed

Amid these plays, the S&P 500 Futures mark 0.10% intraday gains after technology shares and jump in Treasury yields drowned Wall Street the previous day. It’s worth mentioning that the bond yields are near a one-year high in the US and trigger reflation woes to challenge the sentiment off-late.

Moving on, a lack of major catalysts keeps the trades glued to the macro wherein the US covid stimulus may get enough attention ahead of Powell’s speech.

Technical analysis

Despite the latest pullback, the pair stays above the 83.00 threshold, not to mention that mid-month top of 82.41, which in turn directs the bulls toward the December 2018 peak surrounding 83.90.

 

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