Is AUD/JPY signalling risk-off ahead?

AUD/JPY, which is widely considered as a risk barometer, fell to 82.23 in Asia; the lowest level since May 18.

A better-than-expected Australia building consent data failed to lift the pair.

Broad based Yen strength

The Japanese Yen is ruling the roost this Tuesday morning after Greece hinted at a default and Japan’s Yamaguchi squashed hopes of a major change in the BOJ monetary policy.

The major portion of the losses in the AUD/JPY was triggered by Yamaguchi’s comments. Consequently, the drop in the cross does not necessarily signal risk-off.

Nevertheless, caution is advised as the haven demand for the Yen may strengthen in Europe if the Greek bond yields spike. 

AUD/JPY Technical Levels

The cross was last seen trading around 82.35 levels. A break below 81.82 (Apr 12 low) would expose support at 81.49 (Apr 19 low) and 81.00 (zero levels). On the other hand, resistance is seen at 82.84 (200-DMA), which, if breached, could yield a re-test of 83.48 (50-DMA) and 83.88 (May 25 high).