Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Australian Current Account Balance for the third quarter came in at -A$2.3B. Economists predicted a figure of A$10.5B. Forex traders can compare this to the Australian Current Account Balance for the second quarter, reported at A$18.3B. Australian Net Exports of GDP for the third quarter decreased by 0.2% quarterly. Economists predicted a drop of 0.6%. Forex traders can compare this to Australian Net Exports of GDP for the second quarter, which rose 1.7% quarterly.
The Reserve Bank of Australia increased interest rates by 25 basis points to 3.10%. Economists predicted a rise of 25 basis points from 2.85%. Forex traders can compare this to the previous Reserve Bank of Australia interest rate decision, where it hiked rates by 25 basis points. The Australian central bank continues with moderate rate hikes, and the current 3.10% is the highest in a decade. Inflation in Australia is too high, and the RBA will tighten monetary policy further, as outlined in the statement by RBA Governor Phillip Lowe.
Japanese Household Spending for October rose 1.1% monthly and 1.2% annualized. Economists predicted an increase of 1.5% and 1.0%. Forex traders can compare this to Japanese Household Spending for September, which expanded by 1.8% monthly and 2.3% annualized.
Japanese Average Cash Earnings for October increased by 1.8% annualized and Japanese Overtime Pay by 7.9% annualized. Forex traders can compare this to Japanese Average Cash Earnings for September, which rose 2.1% annualized, and to Japanese Overtime Pay, which increased by 6.7%. The Overall Wage Income for Employees for October expanded by 1.8% annualized. Forex traders can compare this to the Overall Wage Income for Employees for September, which rose 2.2% annualized.
The forecast for the AUD/JPY turned bullish after price action corrected into its horizontal support area. Short-term volatility is expected to increase as bulls wrestle with bears for control over the next move, confirmed by the flat Kijun-sen and the descending Tenkan-sen. Adding to the bullish scenario is the Ichimoku Kinko Hyo Cloud, which is on the verge of a bullish crossover with the ascending Senkou Span A moving above the descending Senkou Span B. Traders should monitor the CCI after it contracted into extreme oversold territory, where it recorded a higher low and began drifting higher. A breakout above -100 could result in a short-covering rally and push this currency pair higher. Can bulls overpower bears and guide the AUD/JPY into its horizontal resistance area? Subscribe to the PaxForex Daily Fundamental Analysis and earn over 5,000 pips per month.
Should price action for the AUD/JPY remain inside the or breakout above the 91.500 to 92.550 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 92.000
- Take Profit Zone: 93.900 – 94.650
- Stop Loss Level: 90.800
Should price action for the AUD/JPY breakdown below 91.500, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 90.800
- Take Profit Zone: 87.300 – 88.450
- Stop Loss Level: 91.500
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