Fundamental Analysis of AUD/JPY for October 31, 2018

AUD/JPY has been showed impressive bullish gains, following certain corrections below 80.50 area. AUD is facing challenges and mixed economic reports. AUD managed to gain certain momentum over JPY which is expected to reward in further gains in the process.

Recently Australia's Building Approvals report was published with an increase to 3.3% from the previous value of -8.1% but it failed to meet the expectation of 3.8%. Today Australia's CPI report was published unchanged at 0.4% which was expected to increase to 0.5%, Trimmed Mean CPI report was published unchanged as expected at 0.4%, and Private Sector Credit decreased to 0.4% as expected from the previous value of 0.5%. Ahead of the Trade Balance and Retail Sales reports which are due later this week and expected to be unchanged and indecisive, AUD may struggle a bit further in the process.

On the other hand, ahead of macroeconomic reports and events today, JPY's weakness indicates the opportunity of bullish momentum with sustainability. Today Japan's Prelim Industrial Production report was published with a decrease to -1.1% from the previous value of 0.2% which was expected to be at -0.3%. Moreover, the Bank of Japan is widely expected to leave the key policy rate unchanged at -0.10%. The Monetary Statement, Outlook report and Press Conference justifying the unchanged value of interest rate for the economy. Though Japan's banks are doing quite well, the recent warning from BOJ about settling down a bit provided certain negative bias of JPY bulls.

Meanwhile, JPY struggle amid the economic reports ahead of Policy Report and Monetary Statement indicates further weakness against AUD. The outcome of the BOJ Press Conference will determine a further direction of the pair. If Japan fails to provide upbeat economic reports, AUD is likely to extend its gains in the coming days.

Now let us look at the technical view. After certain Divergence and Convergence below 80.50 area, the price recently pushed higher having Bullish Continuous Divergence leading the price towards the edge of 80.50 area again. As per current price structure, the price is expected to move higher towards 80.50. A break above this level is expected to provide the required push for the price to move higher with a target towards 82.00 and later towards 83.50 area. As the price remains above 78.50 area with a daily close, certain bullish pressures may be observed in the coming days.

SUPPORT: 78.50

RESISTANCE: 80.50, 82.00, 83.50

BIAS: BEARISH

MOMENTUM: VOLATILE

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The material has been provided by InstaForex Company - www.instaforex.com