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Latest AUD JPY Analysis and Forecasts

These S&P Relative Developments Reinforce A Risk-Off Restoration

A great deal is going on in the macro department and this can make it difficult to understand where risk is flowing in broader market as well as the G-10 FX space. A constant back-and-forth between virus related risks and U.S.-China tensions is continuously squeezing equity rallies which has somewhat seeped into G-10 FX risk proxies, stalling rather buoyant rallies. We take a look at two relative ETF charts that are catching our attention and question possible resumptions in risk rallies.

SPY/GLD (S&P 500 vs. Gold)

  • Gold trades at its highest levels since October 2012, maintaining its well-established bid tone, even as the USD rallies off its lows.
  • Steepening Gold outperformance theme has caused the SPY/GLD relative to break through two bull fibo fans, which have acted as great relative sup/res lvls. This has opened the final 61.8% fib fan line.
  • A breakdown through the final line would suggest continued S&P underperformance, proposing a wider risk-off theme is potentially taking control of mkt.

SPY/IEF (S&P 500 vs. 7-10year Treasury Bond ETF)

  • SPY/IEF provides insight into Stocks performance vs. tier 1 safe haven bond mkts.
  • Mkt is breaking lower, with a slip in equities causing a breakdown through relative mean-reversion.
  • SPY/IEF has pierced to new month lows, reinforcing our work in SPY/GLD which suggests a rotation in relative risk.
  • Continued losses would suggest a broader bid in Treasury’s, potentially reinforcing a deeper risk-off tone in global markets.


  • Spot Gold: managing to hold above the 1765 high breakout point, opening immediate upside risks to the 1795/96 zone. This is covered by the 61.8% fib ext. and Oct 2012 high. Above here would open 1825. Fundamentally, it may support a rise in virus fears, whether it be an increase in cases/deaths or a diminishing economic outlook due to virus.
spot gold
  • We’d expect to see a JPY bid pop through with JPY/XXX being affected, namely AUD/JPY, NZD/JPY and CAD/JPY.
  • This ties in with AUD and NZD being significantly affected by the risk-aversion. 
    • AUD/JPY is the focus chart. Breakdown below 72.49 SUP and subsequent selling through 200-EMA @ 72.25 could reinforce a risk-off dynamic has poured into G-10 FX pairs and we’d suggest being short risk.

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AUD/JPY – Live and Historical Rates

The Australian Dollar and the Japanese Yen are two major currencies which do not actually form a major pair, or a commodity pair for that matter, despite the fact that the AUD is indeed a commodity currency. The chart above shows the AUD/JPY rate, which refers to the number of JPY needed to purchase an AUD.


Powered by Australia’s commodity-based economy, the AUD is the world’s 6th most traded national currency, accounting for about 3% of the global FX turn over. Introduced in 1966, the AUD spent its infancy pegged to the British Pound. The arrangement was a reflection of the past colonial relationship between the two countries. The AUD didn’t become a floating currency till 1983. Australia’s (and thus the AUD’s) exposure to the Asian markets makes the currency an excellent choice for forex traders looking for diversification.


The Japanese Yen is the world’s third most-traded currency, behind the USD and the EUR. As such, the JPY has obviously always been popular with forex speculators. The currency has been used for carry-trading massively, at one point to the extent of $1 trillion. Interest-rate drops have since altered this profitable trade-setup. Up Until 1973, the JPY had a fixed exchange rate with the US dollar, as required by the Bretton-Woods system. Since then, it has been a free-floating currency.

The JPY is propped up by the world’s third largest economy nominal GDP-wise, and 4th largest by PPP (Purchasing Power Parity). Japan’s domestic resources include gold, silver and magnesium, but it continues to depend on foreign countries (among them Australia) for a number of key commodities.

AUDJPY Analysis

The JPY’s exposure to the AUD is based on commodities. The two countries are close trade-partners, and Japan is heavily dependent on Australian imports of heavy metals and energy. The JPY is also closely influenced by the USD. The AUD/JPY pair has sometimes presented good carry opportunities.

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