AUD/JPY clocks low below 79.00 as Australia bond yields slide

Offered tone around Aussie gathered pace in Asia on drop in Australian bond yields, pushing the AUD/JPY cross a session low of 78.97.

Rejected at 76.4% Fibo

The cross failed to sustain above 79.42 (76.4% of Brexit day drop) as Australian three-year bond yield trade at a record low yield of 1.39%. This is significantly lower than RBA’s official cash rate of 1.75%.

The drop in the yields represents growing speculation of a RBA rate cut in August. Meanwhile, Japanese yen is trading comatose in Asia, thus failing to provide any cues to AUD/JPY cross.

AUD/JPY Technical Levels

The cross currently hovers just above 79.00 levels. The immediate resistance is seen at 79.42 (76.4% of Brexit day drop), which if breached would open doors for 80.00 (zero figure) levels and 80.46 (previous day’s high). On the other hand, a breakdown of support at 78.85 (July 13 low) would expose 78.47 (50-DMA), under which a major support is seen at 78.09 (61.8% of Brexit day drop).