Today in the early European trading session, the AUD/JPY extended its previous session bullish trend and took further bids around an intraday top closer to 75.10 level, mainly due to the risk-on market sentiment, backed by the on-going optimism over treatment for the highly infectious coronavirus.
Moreover, the renewed hopes over the U.S. COVID-19 aid package also boosted the market risk tone, underpinning the Australian dollar’s perceived risk currency and contributed to the currency pair gains. Apart from this, the broad-based U.S. dollar selling bias, triggered by the combination of factors, also played its major role in supporting the currency pair. Besides this, the currency pair got an extra boost mainly after the analysts at Citigroup downplayed the possibilities of negative interest rates, which gave further support to the Aussie dollar and contributed to the currency par gains.
On the contrary, the renewed tension between the US-China over the trade deal keeps challenging the upbeat market mood and becomes the key factor that keeps the lid on any additional currency pair gains.
The AUD/JPY pair is trading with a bullish bias at 75.45 level on the technical front. Bullish crossover of 75 levels has opened further room for buying until 75.42 level. The closing of the bullish engulfing pattern may drive sharp buying in the AUD/JPY pair; therefore, we have opened a buy trade to target quick 40 pips. Check out a trading plan below…
Entry Price – Buy 74.892
Stop Loss – 74.92
Take Profit – 75.292
Risk to Reward – 1:1
Profit & Loss Per Standard Lot = -$400/ +$400
Profit & Loss Per Micro Lot = -$40/ +$40
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