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The AUD is the strongest of the major currencies today. The JPY is the weakest. That makes the AUDJPY the strongest of the currency pairs. Currently the price of the AUDJPY is up 1.61% on the day.
In the process, the pair has now moved to the highest level since June 2015 – surpassing the previous swing high for the 2022 at 94.31 from March 28 and the April 5 high at 94.16. The high price just reached 95.009 so far. The current price trades at 94.69.
Drilling to the hourly chart below, the price rise above the swing highs from March and April have been able to hold support near those levels on corrective moves off of the high. The ability to hold above that swing area (see yellow area and red numbered circles on the chart below), keeps the buyers in full control after the breakout.
A move below that area would be needed to potentially see disappointing sellers. Absent that, and the buyers are in full control
Of note, from the hourly chart is that the price has been consolidating in an up and down formation over the last six trading days (see red box in the chart below).
During that time, the price of the AUDJPY stayed mostly above its 200 hour moving average (green line in the chart below). Bullish.
Yesterday the price did dip below that moving average for a view hourly bars in holiday-like trading (Easter Monday), but momentum could not be sustained and the price ultimately based against the moving average, and moved back higher in the Asian session today.
The transition from non-trending to trending today – along with the breakout above the 2022 highs – increases the buyers control, and has sellers on the defensive, and hoping.
The buyers are in firm control, and would take a move below 94.31 and 94.1292 give sellers some minor confidence.
Helping the AUDJPY move higher is the yield spread between Australia and Japan rates. Looking at the weekly chart of the spread between the Australian 10 year yield and the Japan 10 year yield below, the spread has widened from a January low of 157 basis points to the current spread of 280 basis points. That move has the spread approaching the highs that created a ceiling from December 2016 to May 2018 near 285 to 290 basis points.
