AUD/JPY Forecast: Tests 50-Day EMA As BOJ Intervention Fears Loom

The Aussie dollar has been a bit choppy on Thursday but continues to see buyers.

AUD/JPY

The Aussie dollar has drifted a little bit lower against the Japanese yen during the Thursday session as we continue to hang around the 50-day EMA. The 50-day EMA is an indicator that a lot of people will be watching, and it has offered a bit of resistance over the last couple of days.

The real story here, of course, is whether or not the Bank of Japan chooses to intervene again. We've seen interventions a couple of different times now, and despite the fact that they have gotten involved, we still see yen weakness in general. And in fact, since the latest intervention, we have already recovered a little more than half of those losses. The Australian dollar pays more at the end of the day than the yen, so it is part of the carry trade here.

BOJ Intervention Concerns and Carry Trade Support

And if we continue to see commodity strength like copper and gold, that could add yet another wrinkle in this market going to the upside. When you look at it, though, you could make an argument that we are essentially range-bound and just bouncing towards the middle of that range between 110 yen on the bottom and 115 yen on the top. It's a little early to call that, but you could make that argument nonetheless. The 50-day EMA being right in the middle and relatively flat makes for a good anchor point. We'll just have to wait and see how this plays out.

A lot of this can come down to risk appetite, so watch that as well. If risk appetite picks up, generally speaking, this pair will start to rally again. I like the idea of buying dips. I like the idea of being paid a little bit every day, and therefore, I like the idea of being short the yen despite the fact that the Bank of Japan has pushed back a couple of times.