AUD/JPY Is In Full Bullish Advance Mode
Admirals | Apr 14, 2016 08:17AM ET
Japanese equities are very important for yen movements, and AUD/JPY is my favorite along with USD/JPY. When foreign investors buy or sell Japanese equities currency-unhedged, there is a positive correlation between the yen and Japanese equities. Translated to common words it means they buy Japanese equities using the spot rate at the time, and so if JPY appreciates / depreciates then it affects the value of the investment for foreigners. So sometimes a foreign investor can buy Japanese stocks and hedge the JPY component. Remember - Nikkei down - AJ/UJ down too.
Technically, AUD/JPY is contained within a bullish pennant with strong bullish advance (marked as red rectangles). As long as the pennant holds we could see rejections from the bottom within 83.40-50 zone, and a potential breakout of the pennant with 84.11 and 84.45 as targets.
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