In the run-up to key Aussie labour market data, AUD/JPY spent Wednesday’s session ranging in the mid-82.00s, bouncing at last Friday’s 82.10 lows but then subsequently failing to sustain an attempted push above the 200-day moving average at 82.62. At current levels just under 82.50, the pair trades with modest gains of about 0.1% on the session. Strength in base metals, as well as resilient January Consumer Sentiment figures from Westpac, helped the Aussie to claim the top spot in the G10 performance table on the day. Despite the positive developments that underpinned the Aussie on Thursday, the day’s price action suggests confirmed that AUD/JPY is not yet ready to break out of the recent 82.00-83.00 range that has persisted since last Friday. If risk-appetite stabilises and FX markets are free to trade more as a function of central bank divergence, then a bullish breakout above 83.00, which would open the door to a move towards 84.00, remains very much on the cards.

That said, firmer RSI conditions, not overbought, also favor the AUD/JPY bulls to overcome the immediate trend line hurdle surrounding 82.75.

However, the 200-HMA level 82.85 and a descending trend line from January 05, close to 83.30, will challenge the pair buyers afterward.

On the contrary, an upward sloping trend line from the previous day, near 82.45, restricts the quote’s immediate downside ahead of the monthly low of 82.08 and the 82.00 threshold.

Following that, a gradual decline towards the early December swing high near 81.70 can’t be ruled out.

AUDJPY Caught by Decisive Fundamentals

Jan 21 2022