AUD/JPY turned lower from a weekly resistance zone and now the pair is heading for a key area of interest.
Will AUD/JPY find demand at the level?
Here’s what we’re seeing in the 1-hour time frame:
AUD/JPY 1-Hour Forex Charts by TV
AUD/JPY has turned lower from the 95.75 area not once but TWICE so far this week!
The pair is now trading at 95.15, which is a hair’s breadth from the 95.00 psychological handle.
Take note that 95.00 is also not too far from an ascending channel and S1 Pivot Point support in the 1-hour chart.
Can AUD/JPY still maintain its uptrend?
Earlier today, we saw that Australia’s monthly CPI clocked in at 5.2% from a year ago in August. That’s higher than July’s 4.9% annual rate! For RBA watchers, the high CPI is also enough to keep another rate hike on the RBA’s table.
Meanwhile, we’ve heard reports that the PBOC, government, and even China’s state banks are making efforts to support sentiment and the yuan’s value amidst property sector concerns in China.
And then there’s the Japanese yen, which continues to lose pips against its major counterparts despite warnings from Japan’s Finance Minister Shunichi Suzuki that they’re “watching market trends with a high sense of urgency.”
Continued support for the Chinese markets as well as hawkish RBA expectations can keep the Australian dollar afloat in the next trading sessions.
AUD/JPY may find buyers at the 95.00 psychological handle if not the 94.75 previous area of interest.
Of course, where AUD/JPY will restart its bullish upswing will also depend on overall risk sentiment. If traders focus on weaker sentiment in the Eurozone or their concerns over a high-interest rate environment, then AUD/JPY may trade below its trend line support before seeing buying pressure.
But if risk appetite gains ground in the next trading sessions, or if tomorrow’s Australian retail sales report surprises to the upside, then AUD/JPY may see bullish candlesticks and gain momentum all the way to its 95.75 weekly highs
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