AUDJPY: the party may be over

February 27, 2015

It has been a busy day in Asia after even busier sessions in North America and Europe. There has been a deluge of economic data from Japan, as well as some important moves in the FX market. This helped to push AUDJPY away from a key resistance zone around the top of its long-term downward channel.

The aussie is back on the back foot today as investors price-in a greater chance of monetary policy loosening from the Reserve Bank of Australia and as the yuan sinks against the US dollar. Bloomberg released a survey which outlined that most economists/market commentators believe that the RBA will lower the official cash rate on Tuesday. This encouraged aussie bears and pushed AUDUSD to its lowest level in a couple of days.

In Japan, economic data released earlier today was largely disappointing but not bad enough to materially change the yen’s push lower. Core consumer prices rose 2.2% y/y in January, missing an expected 2.3% gain and a prior figure of 2.5%. Also, household consumption fell more than expected at -5.1% y/y. The only real bright spot in today’s numbers was a surprisingly strong 4.0% jump in industrial production.

The yen largely brushed aside today’s figures as safe haven flows proved too strong, which when combined with AUD’s weakness saw AUDJPY reach an important medium-term trend line (see chart). Given our weak outlook for the Australian dollar and the softening techs of AUDJPY, it may only be a matter of time before this pair breaks through the aforementioned support line. However, a break through the top of its long-term downward channel would negate this bearish scenario.

Publication source
FOREX.com information  FOREX.com reviews

September 28, 2016
US presidential debate moves unwind
The market’s initial response to the US presidential election debate overnight was a clear sigh of relief. The Mexican Peso, which had hit a record low against the dollar just the day before, surged higher, as too did the Canadian dollar...
September 27, 2016
Markets start last week of September on the back foot
It hasn't been a great start for global equities in this last week of September, with European indices dropping between 1.0 to 1.5 per cent during Monday’s morning session, mirroring a similar performance in Chinese and Japanese markets overnight...
September 23, 2016
Gold rises to critical level on lower-for-longer policy signals
The price of gold extended its rebound modestly on Thursday after the US Federal Reserve provided some key signals on Wednesday that, despite a considerable probability of one Fed rate hike by the end of this year...

OctaFX Rating
XM Rating
Grand Capital Rating
OANDA Rating
FXTM Rating
Larson&Holz IT Ltd Rating

Binary Brokerz Rating
Grand Option Rating
OptionsXO Rating
IQ Option Rating
OptionBit Rating
24option Rating