AUD/JPY hits 8-day low, eyes Aussie Wage price inflation

The political uncertainty and the resulting risk-off trading pushed the AUD/JPY cross to an 8-day low of 83.40 levels.

The drop in the Australia Westpac consumer confidence (May) also appears to have played a role in pushing the AUD/JPY cross to 83.40 levels.

Bad news for risk assets across the globe

AUD/JPY is widely considered a barometer for the risk sentiment. Thus, weakness in the pair is bad news for the risk assets across the globe.

As of now, the downside is being capped by the support offered by the upward sloping trend line drawn from Apr 20 low and May 5 low. A breach of the trend line support would serve as an advanced warning for the stock market bulls across Europe and in the US.

Whether the spot breaks below the trend line support also depends on the quality of the Aussie wage price index data due in a few minutes.

AUD/JPY Technical Levels

The losses seen in Asia have pushed the daily RSI below 50.00 levels. A break below 83.23 (Apr 4 low) would expose 82.68 (May 5 low) and 82.48 (50% Fib retracement of 76.78 - 88.18).

On the higher side, breach of resistance at 83.61 (Monday’s low) would open doors for 83.93 (previous day’s low) and 84.52 (previous day’s high).