AUD/JPY drops in Asia, risk-off underway?

The retreat in AUD/JPY cross, often viewed as a risk barometer, suggests investors could be running for safety following the release of IMF’s bearish global growth forecasts.

Offered at 5-DMA

The cross failed to take out 5-DMA level of 79.85 earlier today following which JPY demand weakened the pair. Moreover, Yen bears are struggling to push the currency lower this week, which screams exhaustion following a sharp losses in the first half of this month.

Meanwhile, the losses in the AUD/USD pair added to the bearish pressure around AUD/JPY cross. Aussie, being a commodity driven currency, could be retreating due to IMF’s downward revision of global growth and US growth forecast.

AUD/JPY Technical Levels

At the time of writing, the pair was trading at 79.40 levels. A breakdown of immediate support at 79.12 (hourly chart support) would open doors for a slide to 78.96 (hourly 200-MA, under which next major support is seen at 77.51 (June 14 low). On the other side, breach of resistance 79.95 (hourly 50-MA) could yield 80.16 (hourly 100-MA). A violation there would expose 80.78 (July 18 high).