AUD/JPY hits 5-week low of 85.60

AUD/JPY hit a five-week low of 85.58 levels in Asia as the risk-off tone in the markets keeps the Yen bid. 

Hovers around 50% Fib

The cross is trading very close to 85.60 - 50% Fib R of 81.78-89.42. The Japanese Yen is in demand in Asia, courtesy of a 1.4 % drop in the SP 500 index and the negative action in the Asian indices. 

Meanwhile, the Aussie dollar is feeling the heat of the risk aversion as well. RBA’s Lowe did talk about the potential for a rate hike in Australia, but his comments have been largely ignored by the markets. 

The currency pair topped out at 89.42 in late July and since then has been steadily losing height. The losses could be extended in Europe if the equities remain risk averse. 

AUD/JPY Technical Levels

An end of the day close below 85.60 [50% Fib] would open doors for a sustained sell-off to 84.73 [100-DMA] and 84.28 [June 19 low]. On the higher side, breach of resistance at 86.00 [1-hour 10-MA[ could yield a rally to 86.48 [1-hour 50-MA] and 87.04 [1-hour 100-MA].