The pair has been pivoting to reverse May - June gains. The pair has been printing lower highs forming a descending triangle. A confirmation of the break on the daily timeframe will warrant a short-sale.
Fundamentally, the AUD is struggling in the face of a global economic slowdown. The currency, a bellwether for global risk sentiment, weakened after the RBA raised rates further to 1.35%. The commodity linked currency is falling as commodities prices dip in the face of a possible global recession.
The JPY safe-haven properties are starting to show up following risk-off sentiments as traders weigh in on recessionary fears making this the ideal pair to trade for the rest of the year.
Risks to this trade remain in the back of my mind. Australia, as opposed to other major economies, is doing a lot better. China's recovery could support the currency. Further inflationary economic releases could push global bond yield higher lifting the interest rate differentials the therefore the the pair.
Trade with caution
Fundamentally, the AUD is struggling in the face of a global economic slowdown. The currency, a bellwether for global risk sentiment, weakened after the RBA raised rates further to 1.35%. The commodity linked currency is falling as commodities prices dip in the face of a possible global recession.
The JPY safe-haven properties are starting to show up following risk-off sentiments as traders weigh in on recessionary fears making this the ideal pair to trade for the rest of the year.
Risks to this trade remain in the back of my mind. Australia, as opposed to other major economies, is doing a lot better. China's recovery could support the currency. Further inflationary economic releases could push global bond yield higher lifting the interest rate differentials the therefore the the pair.
Trade with caution
