Pause hawks? Who is he?
In case you missed it, the Reserve Bank of Australia (RBA) decided to keep interest rates at 4.10%, surprising some traders who raised the rate by another 25 basis points.
While the Central Bank confirmed that “Further tightening of monetary policy may be required,RBA members were more interested in getting a “It’s time to assess the state of the economy and the economic outlook.Besides, the RBA also noted that inflation is “past its peak.” Whoops!
AUD/JPY 15-minute forex Planned by TV
The Australian dollar fell sharply and broadly on the news, but more buyers jumped in shortly after.
For example, AUD/JPY fell to S1 (96.10) from today’s pivot point when the RBA gave up its statement but also returned to the psychological minor handle at 96.50 before the start of the European trading session.
Does this mean that there are more AUD/JPY buyers than sellers?
any. not exactly.
For one thing, AUD/JPY is still struggling to break above the 96.60 high it has been knocking all week.
The recent candles also indicate more resistance around the current prices of the pair.
AUD/JPY break or rebound from 96.60 is likely to depend on the market environment this week.
On the other hand, the RBA’s pause in rate hikes, weaker Uncle Sam manufacturing PMIs, additional production cuts by OPEC+ and Russia all underscore global demand concerns that could lead to a decline in “risky” assets such as the Australian dollar.
On the other hand, the minutes of the FOMC meeting scheduled for this week may remind traders of the Fed’s hawkish biases and push USD/JPY higher, taking AUD/JPY with it.
Let’s see how the AUD/JPY currency pair reacts to the July resistance.
I am more inclined to sell because, on top of global demand concerns, BOJ officials have also hinted that they are not comfortable with the weakness of the Japanese yen recently.
If AUD/JPY is rejected at 96.60 and remains below the trend line we set, the pair may drop to lows near 96.10. It might make new lows and reach the psychological level of 96.00!
However, fresh weekly highs may push AUD/JPY to the R1 region (96.74) if not the 97.00 area of interest from mid-June.
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