BARX – Trade for the Week ahead: Short AUDJPY: FXWW

From the FXWW Chatroom: We recommend short AUDJPY (spot reference: 82.243, target: 80.501, stop-loss: 83.1, risk-reward of 2:1). Risk sentiment is likely to deteriorate if the US does not extend waivers for sanctions against Iran. AUD and JPY are among the most sensitive G10 currencies to global risk (in opposite directions). If the US extends the waiver, oil prices could retrace some of their recent gains, diminishing pressure on inflation expectations in the US. The renewed sensitivity of JPY to 10y differentials would support it versus other currencies in that case.

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