Fundamental Analysis of AUD/JPY for January 10, 2019

AUD/JPY has been gradually developing the bullish momentum, following the bearish bias. Recently, the price bounced off the 70.00 area. AUD is struggling for gains in light of the recent economic reports. This led to certain corrections and volatility in the market while sustaining the bullish pressure in the pair.

AUD opened the new year with impulsive gains but soft fundamentals. As a result, the pair lost the momentum it had earlier. Recently Australia's Trade Balance report was published with a decrease to 1.93B from the previous figure of 2.01B which was expected to increase to 2.18B and Building Approvals slumped to -9.1% from the previous value of -1.5% which was expected to increase to -0.3%. Ahead of Retail Sales report to be published tomorrow which is expected to be unchanged at 0.3%, the Australian Economy is currently quite shaky that is confirmed by downbeat economic data.

On the other hand, JPY is unable to take advantage of AUD weakness due to consistently sour economic reports published recently. Though BOJ Governor Kuroda is still quite optimistic about the Japanese economy and recently stated that it is carrying on with moderate expansion on the back of rising household income. Despite the positive statement from Kuroda, recently Japan's Monetary Base report was published with a decrease to 4.8% from the previous value of 6.1% and Consumer Confidence index dropped to 42.7 from the previous figure of 42.9. Though Average Cash Earnings report showed an increase to 2.0% from the previous value of 1.5%, today Japan's Leading Indicators report was published with a decline to 99.3% from the previous value of 99.6%.

Meanwhile, AUD is expected to gain momentum if the pending Retail Sales report comes better than expected. Otherwise, after certain bullish pressure further bearish momentum can be observed in the pair if Japan publishes solid economic data. Amid optimistic JPY behavior, AUD may struggle to sustain the bullish momentum in the long run.

Now let us look at the technical view. The price is currently residing below 78.50 resistance area from where if a break with a daily close is observed then further bullish pressure with target towards 83.50 area is expected. On the other hand, rejecting off the 78.50 area with a daily close will lead to further bearish momentum in the pair. As per MACD cross, certain bullish pressure will persist. However, until a daily close above 78.50 is observed, the bearish bias is expected to continue.

SUPPORT: 75.00, 76.50

RESISTANCE: 78.50, 80.00

BIAS: BEARISH

MOMENTUM: VOLATILE

analytics5c373b3023f17.png

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