Two factors determined the fall of the AUD/JPY pair, which since 26 June lost 550 points and is now trading at 90.00, near this year lows of 89.40.
At one hand, the AUD is affected by the Greek crisis, fall in prices for gas and metals, Chinese stock market fall, insignificant growth of retail sales in Australia (0.3% in May instead of 0.5% forecasted), and the decision by the Reserve Bank of Australia to keep interest rates unchanged at 2% (however, the further softening of monetary policy is possible.). On the other hand, despite extra soft monetary policy by the Bank of Japan, amid current economic and political problems the Yen strengthened as the safe-haven asset. Some support the pair finds in the difference between Japanese (0.1%) and Australian (2%) interest rates.
Support and resistance
The pair AUD/JPY sharply declined and broke down support levels at 90.75 (0% Fibonacci) and 91.40 (EMA200 on the monthly chart).
On the 4-hour and daily charts, OsMA and Stochastic remain in the sell zone. Despite the pair is oversold, fundamental factors prevail.
Support levels: 89.40, 88.25.
Resistance levels: 90.75, 91.40, 92.00.
It is recommended to stay out of the market or consider short positions.
Sell-limit orders can be placed at 90.75, 91.00, 92.00, 92.50 with targets at 89.40, 89.00 and stop-loss at 93.10.
Sell-stop orders can be placed at 89.30 with the target at 88.25 and stop-loss at 90.10.