Good morning team,
Overnight there were corrections on all JPY pairs as the JPY strengthened due to the safe-haven appeal. The major news event pushing investors into the JPY is the Chinese government cracking down on Chinese tech firms. Chinese tech stocks continued their sell-off Tuesday as concerns around regulatory crackdowns lingered, pushing Hong Kong Index down more than 8% since the start of the week. The popular Krane Shares CSI (KWEB) is down nearly 14% so far this week. Alibaba, its second-largest holding, on Tuesday hit lows not seen since March 2020. This could be a large overreaction in the market.
However, news coming out this morning suggests the Chinese Government is preparing for more financial support for the economy and says investors should not be pessimistic due to the stock declines.
AUDJPY – 1 Hour Chart
Trade Setup: BUY STOP – Entry price 81.14, stop loss 80.34 and take profit 82.74
Stop loss: 80 pips
Take profit: 160 pips