AUD/JPY slammed below 85 handle amid risk-off

The steady overnight recovery in AUD/JPY lost legs post-Tokyo, with bears arriving in full force and knocking-off the rate sharply below 85 handle as risk-off moods seeped back into markets.

AUD/JPY erodes almost 70-pips

The AUD/JPY pair now drops -0.60% to trade at 84.89, recovering slightly from session lows of 84.78. AUD/JPY remains deep in the red zone, as the sentiment turned sour after the Fed minutes came out less hawkish than what looked like at the Fed Dec meeting. FOMC said in its minutes that rate hike could be slowed if Trump under delivers on his fiscal reforms.

The yen remains firmer across the board on increased flighty to safety, while weaker oil prices are seen capping further upside in AUD/USD, leaving the cross heavily offered. Next of relevance for the spot remains the US ADP jobs report and ISM services PMI data for fresh incentives on the USD moves, which will eventually impact both the AUD and JPY.

Technical Levels

Higher side: 85.33 (daily pivot), 86 (round figure)

Lower side: 84.53 (10-DMA), 84.07 (50-DMA)