The Aussie dollar has remained relatively stable in recent months, rising in comparison to weaker counterparts such as the Japanese yen. AUD/JPY – Australian Dollar/Japanese Yen is highly correlated to the risk appetite, which is used as a risk gauge in the currency market.
According to forex brokers in Australia, the price has been moving against a wall of opposition, and there are numerous barriers ahead. From a structural standpoint, the path of least opposition with the wider bearish tendency is on the low. If the US dollar does well on the bid, the Australian dollar will certainly suffer, as will commodities, causing the AUD/JPY to fall.
The Jackson Hole conference begins on Thursday. Risk markets have been trading well as concerns about potential economic growth have subsided.
The risk-off option is flexible. While the US and China may emerge with a neater slate than some other less powerful nations, a risk-off core persists.
Despite a rush of positive daily candles this week, the AUD/JPY is being slid undercover and in the clutches of the bears in the long run. The AUD/JPY is one of the more fascinating Aussie pairings to monitor, as there are some important Japanese data to examine at the end of this week, before the Bank of Japan’s meeting is held next week.
Despite this, the MSCI world market index, which monitors stocks in 50 nations, climbed 0.16 percent to a new high for the cycle.
The STOXX 600 index gained 0.01 percent across Europe. MIAPJ0000PUS, MSCI’s largest index of Asia-Pacific stocks excluding Japan, rose 2.41 percent yesterday. The standard S&P 500 and the Nasdaq both closed at all-time peaks on Wall Street. It was the S&P 500’s 51st record-high closing this year.
However, Victoria, Australia’s second-most populous state, has recorded a sharp increase in new cases of covid, nearly twice the previous day’s total. The state is under lockdown, with curfews in place in Melbourne.
Aside from the local data, the investors will be looking for guidance from the US schedule today. Analysts at Westpac predict the second quarter GDP “will merely be adjusted at the margins (if at all) in its second estimation.”
Investors are primarily awaiting for Jerome Powell, the chairman of the Federal Reserve, to speak at Jackson Hole. If Powell uses the occasion to reveal the official date of tapering, the AUD/JPY will likely trail the behavior of risk assets such as US equities, which may suffer.
The present system, on the other hand, would almost certainly lead to a continuation of the risk-on trend, especially if Powell touts a bullish outlook and expresses lesser worry about delta variant spreading in light of the recent case decrease.
As a result of the above, bearish AUD/JPY traders expect a negative resumption in the next weeks, and the AUD/JPY is strongly linked to risk appetite, and recent trends are positive.