AUD/JPY
Next month will see $200bn in tariffs come into effect on china. With Australia generating nearly a third of their GDP from their exports to China the follow on to Australia is inevitable. A weaker AUD dollar looks likely in the coming weeks.
The Yen is being bought on the back of the latest round of risk aversion. The Turkish Lira crisis has a real risk of extensive contagion and the Turkish Central Bank is going to be trying everything they have got to get the Lira under control. Furthermore, with the BOJ increasingly asking questions about their policy there are rumblings of a more radical change of policy to come from the BOJ. Justin reported this morning on Kazuo Momma , an ex-BOJ member, stating that the BOJ should abandon negative rates.
For the coming week I am looking to re-enter AUD/JPY. I took profit on my last position as we entered the daily support level on Friday, and I am looking now to re-enter on a pullback. The region I favour entering is marked on the 4hr chart below. It is a confluence of a R3 pivot point at 81.58 and the Fib retracement level of the last move down. An alternative to this trade can be found here, where I highlighted a NZD/JPY short on Friday.
