AUD/JPY tests Monday’s high, and then retreats

The cross in the AUD/JPY is seen receding gains, although remains strongly bid amid a sharply USD/JPY rally witnessed during the European session.

AUD/JPY deflates from 84.25

The AUD/JPY pair now rises +025% to 83.95, although hovers within close proximity to 84 handle, as the bulls remain in command amid a major turnaround in risk conditions, as reflected by a -1.60% drop in the CBOE Volatility Index (VIX), a fear gauge, which suggests risk-on trades are back in vogue. Hence, the yen remains broadly sold-off into a renewed risk-on wave.

However, further upside remains capped on the back of ongoing weakness seen behind AUD/USD, which is mainly attributed to heavy selling seen across the commodities’ space, particularly copper and oil prices.

Focus now remains on the US GDP release due later in the NA session, ahead of the Australian building consents and private capex data due later in the week ahead.

Technical Levels

Higher side: 84.25/30 (daily high/ Nov 28 high), 84.92 (daily R2)

Lower side: 83.61 (daily low), 83.15 (daily S1)