AUD/JPY: bear reversal accelerates to test 0.77 handle

AUD/JPY has dumped with the Yen stampeding in early Asia across the board.

AUD/JPY dropped to 77.05 from 77.43 highs while USD/JPY dropped 30 pips in this liquidity following a poor day on Wall street and the series of weak US data of late that has lead to demand for safe haven markets such as bonds. The Aussie was also weak from last week's business with a sell-off from 0.7731 to 0.7530 the low so far.

"The US dollar should remain under broad pressure with US data risks tilting to the downside, making a Fed hike even less likely this month explained analysts at Westpac, adding, "Instead, the more market-sensitive policy decision on 21 Sep could be the Bank of Japan's, with JGB prices having already whipsawed since the last meeting. The key for how far the AUD/USD rally extends this month could be whether the ripples from JGB turbulence spark broader risk aversion."

AUD/JPY levels

AUD/JPY's reversal of teh late august rally has been fierce and the momentum indicators continue to offer a bearish outlook on a bear of the 0.77 handle. 0.7780 comes as next support below 16th august low of 0.7702. On a wider time frame, the weekly charts offer current levels as a key supporting area with the 10 and 20 sma's converging, albeit price now trading below and targeting 0.76/0610 mid August lows. A break back above 0.78 would negate the bearish outlook for the near term.