Oil driven risk-on pushes AUD/JPY to fresh 7-month high

OPEC deal and the resulting uptick in oil prices in the overnight trade triggered broad based risk-on rally.

Consequently, the offered tone around the Japanese Yen strengthened, thus pushing the AUD/JPY cross to a fresh seven-month high of 84.82 levels in Asia.

Trades above monthly 100-MA

The bird was last seen trading just above the monthly 100-MA level of 84.45 levels. Dollar ripped higher across the board on the OPEC deal as the oil rally is seen boosting the already elevated inflation expectations in the US.

Yen took the biggest hit against the USD, while the AUD was relatively resilient.

The immediate focus is on the China PMI figures; however, oil is likely to remains in the driver’s seat.

AUD/JPY Technical Levels

A failure t o hold above the monthly 100-MA level of 74.45 would shift risk in favor of a drop to 74.00 (zero figure), under which the losses could be extended to 83.27 (Oct 2015 low). On the higher side, breach of 85.00 (zero figure) levels could yield a test of 85.57 (Nov 2015 low). A violation there would expose 86.21 (Dec 2015 low).