This cycle pattern on AUD/JPY hints at risk on

2월 6일

AUD/JPY is holding above its 100-day EMA, and so far it looks like the spike lower last Thursday will be left unchallenged.

This is more of an interesting observation than anything else, but... since July AUD/JPY has printed a prominent spike / higher low every 40 - 47 days. If that pattern is to hold, is suggests the next trough could land at the end of May / beginning of April.

Given it is a proxy for risk, does this support a Wall Street rally which currently sits just off if its record highs? Growth outlook remains positive, inflation is falling and the BOJ are unlikely to shift away from an ultra-dovish policy.

As long as any currency gains against the yen are not too aggressive, perhaps AUD/JPY is looking at another crack at 98. Although a feature of this 40-47 day cycle is for gains to be erratic and choppy before producing a sudden selloff into its spike low.

2월 20일

노트

The 40-47 day 'risk-on' cycle appears to be holding well for AUD/JPY. And with the RBA retaining a tightening bias, the BOJ remaining in ultra-dovish mode and Wall Street perched near its record highs, a retest of the 2023 high at a minimum now seems plausible.

But for AUD/JPY to truly extend its rally likely depends on the BOJ's appetite to let its currency slide. Because if it depreciated too quickly, they'll be forced to step in (verbally or otherwise) which could prompt quite a pullback on AUD/JPY.