AUD/JPY: End Of Year Outlook

AUD/JPY

My end of the year target price for the AUD/JPY is 96.00-98.00. During the month of August the Australian Dollar dropped to almost 3 year lows against the Japanese Yen. In this particular scenario we have a case of two currencies that are on opposite ends of the spectrum- while the Yen is a “risk off” Currency which Traders use as a hedge when global markets sell off, the Australian Dollar is very much a “risk on” Currency which thrives on global growth and prosperity. This current turmoil in the global markets which was set off by the economic situation in China has been especially brutal for the AUD, mostly because China is Australia’s most important Trade partner. Australia main export is Iron Ore and Coal, both products which China is the biggest buyer in the world of, if the Chinese economy is stagnant, that would lead to falling demands in both of Australia’s leading export products, which is a lethal blow to the local economy. Once the Markets do stabilize (which we are starting to see signs off), and with a bit more positive reinforcement from the Chinese National Bank, we should begin to see the AUD start to recover and recapture the range of levels it was trading pre- crisis.

AUD/JPY Daily Chart

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