AUD/JPY hits 5-day low on terror-led risk aversion

AUD/JPY hit a 5-day low of 86.03 as the terror attacks in Barcelona saw investors unwind ‘risk-on’ positions in favor of the Japanese Yen and other traditional safe haven assets. 

Bearish outside day/bearish engulfing candle

The daily chart shows the Thursday’s bearish outside day/engulfing candle closed below the 50-DMA. So far, the follow through has been weak, largely due to the risk-off action. 

As per the latest reports from the BBC, Spanish police has successfully avoided the second attack. The news report seems to have calmed nerves, which is evident from the slight recovery in the AUD/JPY cross to 86.27-86.30 levels. 

AUD/JPY Technical Levels

A break above 86.39 [23.6% Fib R of July 27 high - Aug 11 low] would expose 86.505 [38.2% Fib R of 81.78-89.42], above which a major hurdle is seen at 87.00 [July 4 high]. On the downside, breach of support at 86.00 [zero figure] would open up downside towards 85.45 [recent low] and 85.10 [200-DMA].