AUD/JPY screams risk-off, markets rocked by Deutsche bank mess

The regional risk barometer AUD/JPY is taking a beating in Asia as the Deutsche bank mess is making investors across the globe nervous.

Signs of intervention

The cross dropped to a low of 76.19 before making a quick recovery to 76.42 levels. The minor rebound forces us to consider the possibility of BOJ intervention, given the USD/JPY pair neared the 100.00 levels, which is largely being called as the line in the sand for the bulls.

Risk sentiment was rocked after German Chancellor Angela Merkel ruled out state aid for the struggling Deutsche Bank. Moreover, this means the deposit bail-in is coming soon or else how would the bank pay the fines given the state aid has been ruled out.

AUD/JPY Technical Levels

Breakdown of immediate support at 76.25 (weekly pivot support) would open doors for a possible cut through 76.00 (zero figure) and drop to a major support at 75.05 (July 8 low) level. On the higher side, daily high of 76.66 could offer resistance, above which resistance at 77.00 (zero figure) and 77.34 (Sep 23 high) could be put to test.