Jamie's Pick: 08/20/12
Keep an eye on the AUDJPY. As focused on last week, FX risk barometers are not confirming strength in equity risk barometers. A view at the separate components makes the case for a sharp decline in the cross as well. Former AUDUSD support is serving as resistance at 10475 and the USDJPY is reacting at the HUGE 7960 level. 7960 is defined by the 61.8% retracement of the decline from 8061 and the 161.8% extension of the 7790-7879 advance.
8400/80 is resistance in the event of a blow-off in the AUDJPY (I have my doubts about that however as risk seems to be rolling over now).
I remain short AUDUSD and new USDJPY shorts makes me short AUDJPY. The stop on the JPY leg is 7970 and the target is a new all-time low.
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