AUD/JPY clocks fresh 5-week highs amid risk-on

AUD/JPY extends the rebound for the second straight session this Thursday, and remains on track to book fourth straight weekly gain.

AUD/JPY trades beyond all major DMAs

The AUD/JPY pair jumps +0.50% to fresh five-week highs of 86.53, after having a staged a solid recovery from just under 85 handle. AUD/JPY, risk barometer, rallies hard amid persistent risk-on trades, with renewed optimism sparked by Fed Chair Yellen’s comments, supporting further rate increases.

Additionally, rallying oil prices lift the sentiment around the resource-linked AUD, which in-turn drives AUD/JPY higher. Strong gains seen in the cross can be largely attributed to a solid rebound staged by the AUD/USD pair. While the yen trades muted versus the greenback, providing little impetus to the prices.

Markets appear to have ignored softer Aus jobs report, as they gear up for fresh cues on the sentiment from the upcoming ECB decision.

Technical Levels

Higher side: 86.93 (daily R2), 87.17 (Dec 16 high)

Lower side: 85.71 (10-DMA), 85.23 (20-DMA)