AUDJPY in full bullish advance mode

Japanese equities are very important for Yen movements and AUDJPY is my favorite along with USDJPY. When foreign investors buy or sell Japanese equities currency-unhedged there is a positive correlation between the Yen and Japanese equities. Translated to common words it means they buy Japanese Equities using Spot rate at the time and so if JPY appreciates / depreciates then it affects the value of the investment for foreigners. So sometimes a foreign investor can buy Japanese Stocks and hedge the JPY component. Remember -Nikkei down – AJ/UJ down too.

Technically AUDJPY is contained within a bullish pennant with strong bullish advance (marked as red rectangles). As long as the pennant holds we could see rejections from the bottom within 83.40-50 zone and a potential breakout of the pennant with 84.11 and 84.45 as targets.

read the original article on AdmiralMarkets.com