Top Story

Could AUD/JPY break THIS resistance ahead of Aussie jobs and BoJ?

As we reported earlier, the USD/JPY could be poised for a bullish breakout potentially after the Federal Reserve almost certainly raises interest rates tomorrow. We anticipate that the FOMC may prepare the market for two further rate increases this year, thanks to recent improvement in economic conditions and rising consumer inflation in the US which hit a 6-year high of 2.8% as the Bureau of Labor Statistics reported earlier today. If this turns out to be the case, the USD/JPY could stage a bullish breakout and this in turn may lead to similar moves in other yen crosses, including the AUD/JPY.  

Today the generally positive sentiment in the stock markets has helped to keep this risk-sensitive AUD/JPY cross supported ahead of Aussie employment data on Thursday and the Bank of Japan’s policy decision a day later on Friday. In the event the Aussie jobs data comes out ahead of expectations, or the BoJ does not deliver a surprisingly hawkish policy statement, then the AUD/JPY could break higher, if it hasn’t already done so before then.

Recently, the AUD/JPY has found it difficult to get past the 84.50 key resistance level. However, the corresponding sell-offs have been progressively shallower, suggesting price is gearing up for a potential breakout. In the event the bulls eventually come out on top and 84.50 is taken out, then we could see follow-up technical buying pressure towards the next resistance and long-term trend line at 87.00-87.25 area. However, if support at 82.60 gives way first then we would have to put our bullish views on hold until further confirmative price action emerges.

Source: eSignal and

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.