Chart of the day - AUDJPY (14.06.2022)

Global stock markets as well as cryptocurrencies experienced a massive sell-off yesterday as the Wall Street Journal report sparked fears of a 75 basis point FOMC rate hike tomorrow. An improvement in risk moods can be spotted this morning with indices from Europe trading higher. AUDJPY, a FX pair considered to be risk barometer, also trades higher and is one of the best performing G10 crosses today. However, traders should expect markets to remain nervous until FOMC decision tomorrow at 7:00 pm BST. As market expectations have tilted towards a 75 basis point rate hike, a scope for a dovish surprise increased.

Taking a look at AUDJPY chart at H4 interval, we can see that the pair has halted pullback at 38.2% retracement of a recent upward impulse (93.20 area). An attempt of breaking below failed, resulting in a candlestick with long, lower wick that heralded a rebound. Pair bounced off the 93.20 zone but the advance was halted this morning by a short-term resistance in the 94.00 area. Support at 93.20 and resistance at 94.00 are key near-term levels to watch. The pair is likely to respond to changes in overall risk sentiment so FOMC meeting is a significant potential catalyst for the pair. AUDJPY may also move following the release of monthly activity data from China during the Asian session ahead.

Source: xStation5