Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Australian Westpac Leading Index for January decreased by 0.1% monthly. Forex traders can compare this to the Australian Westpac Leading Index for December, which was flat at 0.0%.
The Australian Wage Price Index for the fourth quarter increased by 0.9% quarterly and by 4.2% annualized. Economists predicted a rise of 0.9% and 4.1% annualized. Forex traders can compare this to the Australian Wage Price Index for the third quarter, which rose 1.3% quarterly and by 4.1% annualized.
The Reuters Tankan Index for February came in at -1. Forex traders can compare this to the Reuters Tankan Index for January, reported at 6.
The Japanese Trade Balance for January came in at -¥1,758.3B, and the Japanese Adjusted Trade Balance at ¥0.24T. Economists predicted a reading of -¥1,925.9B and -¥0.23T. Forex traders can compare this to the Japanese Trade Balance for December, reported at ¥68.9B, and the Japanese Adjusted Trade Balance at -¥0.41T. Exports for January surged by 11.9% annualized, and Imports plunged by 9.6% annualized. Economists predicted an acceleration of 9.5% and a contraction of 8.4%. Forex traders can compare this to Exports for December, which rose by 9.7% annualized, and Imports, which dropped by 6.9% annualized.
Another relatively quiet data on the economic front will allow traders to focus on sticky inflation. As more data pours in, more traders dial back hopes for aggressive interest rate cuts, which central bankers have cautioned against, amid underlying upside pressures on inflation. While one month of upward surprises does not change the previous trend, it served as a reminder that hopes for significant monetary policy easing were unwarranted.
The forecast for the AUD/JPY turned bearish after this currency pair rallied into its horizontal resistance area over the past fifteen trading sessions. Following a bullish crossover, the Tenkan-sen continues to move higher, but the Kijun-sen has flatlined, suggesting an easing of upside momentum. Adding to rising selling pressure is the Ichimoku Kinko Hyo Cloud, which adopted a bearish stance. The Senkou Span A and the Senkou Span B are drifting lower and could attract price action like a magnet. Traders should also monitor the CCI in extreme overbought territory. A breakdown below 100 could trigger the first wave of selling, and a push below 0 may accelerate the pending correction. Can bears regain control over the AUD/JPY and pressure this currency pair into its horizontal support 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 breakdown below the 98.250 to 98.950 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 98.450
- Take Profit Zone: 96.150 – 96.600
- Stop Loss Level: 99.250
Should price action for the AUD/JPY breakout above 98.950, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 99.250
- Take Profit Zone: 99.700 – 100.000
- Stop Loss Level: 98.950
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