From a technical perspective, I expect some 600-pip range trading on a medium-term basis roughly between 76.00 and 81.50;
Flow wise, there has been a lot of noticeable buying from Japanese real money accounts of both the AUD and NZD in recent weeks;
This pair is traditionally one of the favourite ‘risk-off’ plays but with a Trump election win looking increasingly unlikely, I expect many of these trades to be reversed before the vote commences.
I remain a USD bear around current levels so therefore I prefer the long AUD/USD leg as opposed to the long USD/JPY leg of this cross trade. In fact I will feel quite comfortable in selling USD/JPY rallies if/when resistance is reached and confirmed in the cross.
That said, my preferred trade is to be long AUD/USD on all time-frames. For now I see medium-term support holding around .7500 and short-term support at .7600/20 providing a good entry level.