AUD/JPY seeking a test of 84.50/85.00 – Westpac

Lots of good news is priced into AUD/JPY above 82 but it is hard to make the case for severe retracement near term, says Sean Callow, FX analyst at Westpac Global Markets Strategy Group.

“Our baseline scenario multi-week is a test of 84.50/85.00, with the obvious risks to this view stemming from Europe” Sean notes. “AUD/JPY gains should continue to be heavily reliant on AUD/USD as USD/JPY is likely to remain broadly range-bound. US data flow is unlikely to raise US yields enough to provide the fuel for a sustained break of USD/JPY 78, while the BoJ intervention threat should keep 76 very sticky” Mr. Callow adds.

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