AUD/JPY flirts with danger at key support level

AUD/JPY flirts with danger at key support level

The pair is trading near 1-year lows, at levels last seen in April last year

The yen continues to gain as the Nikkei slides on the back of more political tensions in Japan, with Japanese prime minister Abe having seen his approval ratings take a hit over the weekend.

Meanwhile, continued talk on trade wars and retaliation has seen the aussie and kiwi take quite a hit over the past few trading days.

All that makes for a set up for AUD/JPY to head lower – as warned earlier last week
here, but we are now at a make-or-break level for the pair.

At the moment, it is holding on to lows from last April but it’s looking awfully likely that the support level will start to give way.

From a technical perspective, that would be a big break – one similar to that of USD/CAD
breaking above it’s recent range from the second half of last year. Since that break, USD/CAD is up almost 200 pips already.

If the April support for AUD/JPY gives way, expect a quick move down towards 79.30 – which is the 61.8 retracement level on the daily chart.

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