AUD/JPY spikes as Shanghai catches bid

By FXStreet FXStreet (Bali) – AUD/JPYhas seen a major spike higher, worth over 60 pips for now, travelling from 85.50s into 86.20s at the open of trading in Shanghai, with China A50 FTSE futures trading more than 3% higher today.

Sentiment propped up by PBOC liquidity injection

The sentiment has improved quite dramatically, following the decision by the PBOC to inject 130 bn yuan into the market, which as noted earlier, is the highest since September 2015, aimed at stabilizing the Chinese stock market, which saw a massive 7% meltdown yesterday.

AUD/JPY key levels

On the upside, 86.20 is the first key level to the upside, followed by 86.75 (50% retracement from Monday’s sell-off) ahead of 87.00/87.20 (round number + horizontal support). On the downside, a return of risk-averse conditions may see 86.00 round number retested ahead of the trend lows.
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Source:: FX Street