22 Jul 2013
AUD/JPY gapped lower in its initial reaction to Japanese election results
FXstreet.com (Barcelona) - With Sunday’s Japanese election victory for Abe and the recent news out of Australia’s RBA, the AUD/JPY should be on a track to the upside. In a bout of “fading the news”, though, the initial action was lower Monday.
AUD/JPY should rally on the Abe victory, but is the news already priced in?
With Prime Minister Abe repeating on Sunday that he would focus on fixing the world's third-biggest economy with his "Abenomics" mix of hyper-easy monetary policy, fiscal spending and a growth strategy including reforms such as deregulation, the intuitive move for the AUD/JPY cross would be to run to the upside. With the Australia’s RBA coming out not quite as dovish as expected last week, it seems like a dual push to the upside for AUD/JPY. The big question for traders is how much of these factors have already been accounted for in recent days’ trading.
AUD/JPY key technical levels
AUD/JPY technically appears set to continue to work its way at least up to 93.76 from 92.16 early Monday. Short-term support for AUD/JPY comes in at Fibonacci support of 91.893. That support is followed by the 7/19 intraday pivot low of 91.59 and the 7/12 short-term low at 89.69. First resistance for AUD/JPY comes in at the Friday’s closing hour high of 92.337, followed by Friday’s high of 92.551 and the 7/9 intra-day high of 93.066.
AUD/JPY should rally on the Abe victory, but is the news already priced in?
With Prime Minister Abe repeating on Sunday that he would focus on fixing the world's third-biggest economy with his "Abenomics" mix of hyper-easy monetary policy, fiscal spending and a growth strategy including reforms such as deregulation, the intuitive move for the AUD/JPY cross would be to run to the upside. With the Australia’s RBA coming out not quite as dovish as expected last week, it seems like a dual push to the upside for AUD/JPY. The big question for traders is how much of these factors have already been accounted for in recent days’ trading.
AUD/JPY key technical levels
AUD/JPY technically appears set to continue to work its way at least up to 93.76 from 92.16 early Monday. Short-term support for AUD/JPY comes in at Fibonacci support of 91.893. That support is followed by the 7/19 intraday pivot low of 91.59 and the 7/12 short-term low at 89.69. First resistance for AUD/JPY comes in at the Friday’s closing hour high of 92.337, followed by Friday’s high of 92.551 and the 7/9 intra-day high of 93.066.