The safe-haven currency Japanese yen is losing it’s appeal in the wake of the risk-on market sentiment, which could be attributed to the latest optimism about the coronavirus vaccine. Moderna shared the positive results of its phase one experiment for its COVID-19 vaccine, which weakened the demand for the safe-haven Japanese yen and pushed the currency pair AUD/JPY higher.
The drugmaker company Moderna said there was a high probability that this vaccine would provide protection against coronavirus disease. This news rose risk sentiment in the market and made the US dollar weaker. The broad-based US dollar reported modest losses on the day and dropped further from Friday’s 3-weeks high, which eventually held investors from placing any strong position and limited the upward trend of USD/JPY currency pair, which also triggered buying in AUD/JPY.
The AUD/JPY pair traders did not give any significant attention to Tuesday’s dovish RBA meeting minutes; wherein they showed that the board members were prepared to increase bond purchases to control the economic fallout caused by the coronavirus pandemic. The buyers also ignored the intensifying tension between the US-China and fears about the second wave of coronavirus outbreak.
The AUD/JPY has violated the ascending triangle pattern, which can be seen on the 4-hour timeframe at 70.166 level. Bullish crossover of this level could drive more buying until the next resistance level of 71.35. The recent two candles on the 4-hour timeframe are suggesting odds of bullish trend continuation. Therefore, we have taken a buying position at 70.694 with a stop loss at 70.094 and take profit at 71.494.
Entry Price – 70.694
Stop Loss – 70.094
Take Profit – 71.494
Risk to Reward – 1.33
Profit & Loss Per Standard Lot = -$420/ +$560
Profit & Loss Per Micro Lot = -$42/ +$56