Source: PaxForex Premium Analytics Portal, Fundamental Insight
The Australian AiG Services Index for June came in at 48.8. Forex traders can compare this to the Australian AiG Services Index for May, reported at 49.2.
The Australian Trade Balance for May came in at A$15,965M. Economists predicted a figure of A$10.725M. Forex traders can compare this to the Australian Trade Balance for April, reported at A$13,248M. Exports for May increased 9.5% monthly, and imports by 5.8%. Forex traders can compare this to exports for April, which rose 5.0%, and to imports, which decreased 0.8%.
Foreign Buying of Japanese Bonds for the period ending July 2nd came in at -¥1,415.4B, and Foreigners Buying of Japanese Stocks at -¥490.4B. Forex traders can compare this to Foreign Buying of Japanese Bonds for the period ending June 25th, reported at -¥1,599.3B, and to Foreigners Buying of Japanese Stocks at -¥419.1B.
Japanese Foreign Reserves for June came in at $1,311.3B. Forex traders can compare this to Japanese Foreign Reserves for May, reported at $1,329.7B.
The Preliminary Japanese Leading Index for June came in at 101.4, and the Preliminary Japanese Coincident Index at 95.5. Forex traders can compare this to the Japanese Leading Index for May, reported at 102.9, and to the Japanese Coincident Index at 96.8.
Financial markets attempt to stabilize following the release of the FOMC meeting yesterday in the US. The US central bank is likely to raise rates by 75 basis points in July, followed by a 50 basis point increase, and then a series of 25 basis point hikes until interest rates reach 3.75%. More are likely, dependent on inflation, while markets expect the Bank of Japan to surprise with a change in monetary policy. The collapse of the Euro has analysts change their stance on the ECB, which could hike interest rates by 50 basis points this month.
The forecast for the AUD/JPY remains bearish after price action was rejected by its horizontal resistance area. Confirming the lack of bullishness is the flat Ichimoku Kinko Hyo Cloud, suggesting the next move will be to the downside. The Kijun-sen and the Tenkan-sen also flatlined, pointing towards a lack of upside pressure. Traders should monitor the CCI after it has completed a breakout from extreme oversold territory. It is likely to drift higher but will remain below zero before a renewed push to the downside, creating a boost in short-term volatility. Can bears maintain control over price action in the AUD/JPY and force it 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 breakout above 93.000, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 92.600
- Take Profit Zone: 87.300 – 88.450
- Stop Loss Level: 94.150
Should price action for the AUD/JPY breakout above 93.000, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 94.150
- Take Profit Zone: 96.100 – 96.850
- Stop Loss Level: 93.000
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