FX Analysis – AUDUSD and Gold get a boost, JPY spikes on possible intervention.

AUDUSD

AUD saw gains to come within a whisker of the key 0.64 level, after hawkish leaning commentary from RBA Assistant Governor Kohler, who noted the decline in inflation is more gradual than previously thought. The Aussie also helped by a weaker USD and improved risk sentiment. The 0.64 level will be key in the near term as the mid-point of AUDUSD 3-month trading range is likely to act as resistance and support and will dictate which side of the range AUDUSD will be testing next.

USDJPY

USDJPY rose to fresh peaks of 151.92 before a sharp move lower in the cross was observed without any clear catalyst which of course generated suspicions of intervention, especially given the move happened around 10am EDT, where intervention has occurred before. Also adding to the intervention narrative was comments from Japanese Finance Minister Suzuki during the Asian session where he spoke of “undesirable moves in the FX market”. USDJPY fell sharply from 151.92 to 151.19 but did retrace back to 151.70 after the dust settled, if this was a BoJ intervention it seems the 152 level may be the line in the sand and one to watch closely for Yen traders.

XAUUSD

Gold rallied on Monday, recouping around half of Fridays losses after finding support at its the Oct lows to highs 38.2 fib retracement level which also matches up with the 200-day SMA. A weaker USD and falling yields also giving gold a boost along with residual safe haven demand.