ASX 200, AUD/JPY Outlook Dictated By COVID-19 Lockdown Measures

ASX 200, AUD/JPY, Covid-19, Australia – Speaking Factors:

• Re-imposition of lockdown measures may gasoline threat aversion within the coming days as native circumstances proceed to climb
• The ASX 200 struggling at pivotal inflection level as weakening fundamentals hamper the current rally
• AUD/JPY stays constructive though Covid-19 issues could drag on the risk-sensitive trade

A ‘second wave’ of coronavirus infections in Australia’s second most populous state, Victoria, could result in the imposition of additional lockdown restrictions as 12 suburbs inside the greater-Melbourne space had been positioned below strict stay-at-home orders on July 1.

Recording an additional 74 circumstances in a single day, the state is single-handedly holding again the nationwide easing of restrictions with the Australian Medical Affiliation (AMA) urging native Premier’s to halt their roll-back plans till the outbreak in Victoria is introduced below management.

In a determined effort to suppress the outbreak Victorian Premier Daniel Andrews has additionally carried out ‘laborious’ lockdowns for 9 Melbourne tower blocks, leading to 3,000 residents restricted to their flats for at the very least 5 days, after a surge of circumstances linked again to the “vertical cruise ships”.

Supply – Vic Well being

Given the reliance of the native financial system on tourism, these current developments could proceed to hamper the opening of state and territory borders leading to additional losses to an trade decimated by lockdown restrictions and social distancing measures.

To that finish, incapability to efficiently include the outbreak may probably gasoline native threat aversion, resulting in a discounting of growth-sensitive belongings such because the ASX 200 and AUD/JPY trade price.

ASX 200 Every day Chart – Key Fibonacci Resistance Proving Impenetrable

ASX 200 every day chart created utilizing TradingView

Acquainted resistance on the 61.8% Fibonacci (6,124) has as soon as once more stifled consumers of the ASX 200, because the 6% rally from the 50% Fibonacci (5,792) appears to be working out of steam.

Though the Momentum indicator has notably strengthened into optimistic territory the event of the RSI means that extra sustained pull-back could also be on the playing cards, because it reverses simply shy of the bullish area above 60.

Assist on the psychologically pivotal 6,000 degree could proceed to behave as a security internet for would-be consumers because the steepening of the 50-day transferring common (5,730) suggests bias stays skewed to the topside.

A break and shut above the 23.6% Fibonacci (6,236) and 200-DMA (6,261) is required for bullish validation and should carve a path for the Australian benchmark to push again to check the March excessive (6,524).

Conversely, a every day shut beneath 6,000 may re-invigorate sellers, clearing a path again to the month-to-month low (5,021) and 50% Fibonacci (5,792).

AUD/JPY Every day Chart – Poised To Transfer Increased

AUD/JPY every day chart created utilizing TradingView

AUD/JPY stays constructive above assist on the 61.8% Fibonacci (74.16) as a bullish cross-over on the moving-averages suggests a possible take a look at of the December excessive (76.245) may happen within the coming days.

Nevertheless,resistance on the June 16 excessive (75.08) could probably cap additional upside ought to the RSI fail to strengthen into overbought territory because the Momentum indicator suggests a correction again to assist on the 61.8% Fibonacci (72.72) may eventuate.

Lack of ability to carry this key degree may sign a reversal of the rally from the March lows, with worth clearing the 200-DMA (72.31) probably resulting in a retest of assist on the psychologically pivotal 70 deal with.

— Written by Daniel Moss, Analyst for DailyFX

Observe me on Twitter @DanielGMoss