This Closely Watched Risk Gauge for Currencies Is Flashing a Warning Sign
- Aussie dollar-yen cross breaks below uptrend, 200-dma
- Investor sentiment shook by Covid protests, Fed hawks
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A key gauge of risk sentiment in the currency market is flashing a warning sign amid concerns over the impact of China’s Covid policy and a hawkish Federal Reserve.
The Australian dollar-Japanese yen cross has fallen below the uptrend it has been in this year and its 200-day moving average, a breach which points the way to further downside indicating a worsening of sentiment in the currency market. The pair slumped 1.6% Monday as traders reacted to China’s Covid curbs erupting in protests and Fed officials emphasizing the need for more rate hikes.