The Australian Dollar (AUD) extended downside movement against the Japanese Yen (JPY) on Friday, dragging the price of AUDJPY to less than 85.00 amid release of some key economic news. The technical bias remains bearish because of a lower low in the recent downside move.
As of this writing, the pair is being traded near 84.55. A support may be noted around 83.77, a short-term horizontal support ahead of 81.57, a major horizontal support area and then 76.78,the swing low of the giant bullish pin bar which was emerged last month. The technical bias shall remain bullish as long as the 76.78 support area is intact.
On the upside, a hurdle can be seen around 86.70, the swing high of the last major upside rally ahead of 87.00, the psychological number and then 89.37, a major horizontal resistance area.
Japan Monetary Policy
Bank of Japan Governor Haruhiko Kuroda offered an upbeat view of the economy last week but sought to douse market talk the central bank may soon consider raising interest rates, vowing instead to keep policy loose to achieve the BOJ’s 2 percent inflation goal. Kuroda also said he did not see recent yen falls as a problem for Japan’s economy, saying that a weak currency helps accelerate inflation by boosting import costs and in so doing raise inflation expectations – a crucial element in the BOJ’s plan to beat economic stagnation. Kuroda’s remarks came after the BOJ’s widely expected decision to keep unchanged its pledge to guide short-term rates at minus 0.1 percent and the 10-year government bond yield around zero percent.
Considering the overall technical and fundamental outlook, selling the pair around current levels could be a good strategy as we have got some valid bearish reversal candles.
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