AUD/JPY dips below 1-hour 100-MA, risk-off ahead?

The AUD/JPY cross extended the overnight losses and fell below the 1-hour 100-MA of 84.33 in Asia after the Wall Street ended on a weak note.

Dow 30 index fell 0.29% or 61 points. The S&P 500 futures and NASDAQ futures currently trade weaker by 4 points and 12 points, respectively. The strength in the Japanese Yen (drop in AUD/JPY) in the wake of the weakness in the US futures signals the potential for risk-off action in the Asian and European equities.

Australia’s ASX 200 is down 1.45%. This is the third time the Aussie index is down more than 1% this month. European futures - FTSE 100 and DAX - are down 25 points each. 

The fact that oil prices closed in a bear market (down more than 20% from the yearly high) also adds to the risk-off tone and keeps the Yen well bid and the commodity currencies like the AUD under pressure.

The cross was last seen trading around 84.25; down 0.25% on the day. The BOJ minutes released this Wednesday morning failed to have any impact on the Yen pairs.

AUD/JPY Technical Levels

The pair clocked a session low of 84.14, pushing the RSI on the 1-hour chart into the oversold territory. Thus, a minor correction could be seen. A move back above 84.33 (1-hour 100-MA) would expose 84.64 (1-hour 50-MA) and 84.81 (resistance on 1-hour). On the downside, break below 83.88 (May 25 high) could yield a pullback to 83.71 (10-DMA) and 83.30 (200-DMA).