11 Aug 2015
AUD/JPY: Bulls conviction flourishing post 92.40 breakout
FXStreet (Bali) - Following a startling recovery during the last European/American overlap time, AUD/JPY remains bet during Asia, with early Tokyo flows sending the exchange rate up towards the 92.50 area, breaking into new 6-week highs.
COT: Bullish stars aligning
Reading the latest CoT report, one can see open interest on the Australian Dollar went up with total lev accounts adding more business to the upside after the RBA surprising shift on AUD, which was a big deal, with no much to read into as per commercial accounts. With regards to lev funds, both increased equally, while dealers (net hedgers) showed a slight improvement in favour of AUD longs. As per Asset Managers, there was a big flip as many shorts bailed out in response of the latest RBA outcome.
Meanwhile, the Japanese Yen saw open interest go up due to an increase in total lev shorts adding business. Commercials bought aggressively but couldn't turn price around. Lev funds support the bearish Yen assessment after more bets to the downside were reinstated, while dealer positions and asset managers only reinforced the bearish readings on the Yen.
AUD/JPY technicals
The breakout of 92.40 resistance is quite meaningful from a technical standpoint, as it leaves the door wide open for the next topside target at 93.00 round number, ahead of 93.50 mid round figure and 94.00 handle. Supporting the bullish case, the 2 and 10yr yield curves in the Australian vs Japanese have seen an expansion in favour of the former, while today's market conditions seem to be 'risk-on' friendly, thus strengthening the notion that further topside may be seen. The next risk event in the calendar is due in just under an 1h at 1.30GMT, when the Australian NAB buiness confidence/conditions report is published, usually having an initial algo-led effect in prices anywhere from 10 to 20 pips.
COT: Bullish stars aligning
Reading the latest CoT report, one can see open interest on the Australian Dollar went up with total lev accounts adding more business to the upside after the RBA surprising shift on AUD, which was a big deal, with no much to read into as per commercial accounts. With regards to lev funds, both increased equally, while dealers (net hedgers) showed a slight improvement in favour of AUD longs. As per Asset Managers, there was a big flip as many shorts bailed out in response of the latest RBA outcome.
Meanwhile, the Japanese Yen saw open interest go up due to an increase in total lev shorts adding business. Commercials bought aggressively but couldn't turn price around. Lev funds support the bearish Yen assessment after more bets to the downside were reinstated, while dealer positions and asset managers only reinforced the bearish readings on the Yen.
AUD/JPY technicals
The breakout of 92.40 resistance is quite meaningful from a technical standpoint, as it leaves the door wide open for the next topside target at 93.00 round number, ahead of 93.50 mid round figure and 94.00 handle. Supporting the bullish case, the 2 and 10yr yield curves in the Australian vs Japanese have seen an expansion in favour of the former, while today's market conditions seem to be 'risk-on' friendly, thus strengthening the notion that further topside may be seen. The next risk event in the calendar is due in just under an 1h at 1.30GMT, when the Australian NAB buiness confidence/conditions report is published, usually having an initial algo-led effect in prices anywhere from 10 to 20 pips.