Source: PaxForex Premium Analytics Portal, Fundamental Insight
Australian Retail Sales for December plunged 2.7% monthly. Economists predicted a rise of 0.1% monthly. Forex traders can compare this to Australian Retail Sales for November, which increased 1.6% monthly. Australian Retail Sales, excluding inflation for the fourth quarter, expanded by 0.2% quarterly. Forex traders can compare this to Australian Retail Sales, excluding inflation for the third quarter, which rose contracted by 0.1% quarterly.
The Reserve Bank of Australia kept interest rates unchanged at 4.35%. Economists predicted no change from 4.35%. Forex traders can compare this to the previous Reserve Bank of Australia's interest rate decision, where it kept interest rates unchanged. In its press release, the Australian central bank noted that inflation has eased but remains too high, while the outlook is uncertain. It confirmed that its priority is to return inflation to its target rate and added that services inflation could follow the global trend and move higher.
Japanese Household Spending for December contracted by 0.9% monthly and 2.5% annualized. Economists predicted a rise of 0.2% and a decrease of 2.0%. Forex traders can compare this to Japanese Household Spending for November, which dropped by 1.0% monthly and 2.9% annualized.
Japanese Average Cash Earnings for December increased by 1.0% annualized, and Japanese Overtime Pay decreased by 0.7% annualized. Forex traders can compare this to Japanese Average Cash Earnings for November, which rose by 0.2% annualized, and Japanese Overtime Pay, which expanded by 0.9% annualized. The Overall Wage Income for Employees for December rose by 1.0% annualized. Forex traders can compare this to the Overall Wage Income for Employees for November, which increased by 0.7% annualized.
The forecast for the AUD/JPY turned cautiously bullish after this currency pair stabilized at its horizontal support area. Short-term volatility could increase after the descending Tenkan-sen has completed a bearish crossover below the flat Kijun-sen. Adding to the upside momentum is the ascending Senkou Span A of the widening Ichimoku Kinko Hyo Cloud, with the Senkou Span B flat. Traders should also monitor the CCI after it has created a higher low in extreme oversold territory followed by a breakout. This technical indicator has plenty of upside potential, and a move above zero could trigger the next wave higher. Can bulls increase control over the AUD/JPY and push price action into its horizontal resistance area and new 2024 high? 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 96.300 to 96.900 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 96.600
- Take Profit Zone: 98.150 – 98.600
- Stop Loss Level: 96.100
Should price action for the AUD/JPY breakdown below 96.300, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 96.100
- Take Profit Zone: 95.100 – 95.500
- Stop Loss Level: 96.300
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