Source: PaxForex Premium Analytics Portal, Fundamental Insight
Australian Building Approvals for April plunged 8.1% monthly, and Private House Approvals dropped 3.8% monthly. Economists predicted a contraction of 8.1% and 3.8%. Forex traders can compare this to Australian Building Approvals for March, which decreased 1.0% monthly, and Private House Approvals, which dropped 3.7% monthly.
The Australian Current Account Balance for the first quarter came in at A$12.3B. Economists predicted a figure of A$6.5B. Forex traders can compare this to the Australian Current Account Balance for the first quarter, reported at A$11.7B. Australian Net Exports of GDP for the first quarter decreased by 0.2% quarterly. Economists predicted an increase of 1.3%. Forex traders can compare this to Australian Net Exports of GDP for the fourth quarter, which rose by 1.1% quarterly.
The Reserve Bank of Australia increased interest rates by 25 basis points to 4.10%. Economists predicted no change from 3.85%. Forex traders can compare this to the previous Reserve Bank of Australia interest rate decision, where it surprised markets with a 25 basis point increase to 3.60%. It marked the second consecutive meeting where the Australian central bank acted hawkish versus dovish expectations and could serve as a blueprint for other central banks to follow suit.
Japanese Household Spending for April dropped by 1.3% monthly and 4.4% annualized. Economists predicted a rise of 1.5% and 0.4%. Forex traders can compare this to Japanese Household Spending for March, which decreased by 0.8% monthly and 1.9% annualized.
Japanese Average Cash Earnings for April increased by 1.0% annualized, and Japanese Overtime Pay decreased by 0.3% annualized. Economists predicted a rise of 1.9% and 1.4%. Forex traders can compare this to Japanese Average Cash Earnings for March, which increased by 1.3% annualized, and Japanese Overtime Pay, which expanded by 1.2% annualized. The Overall Wage Income for Employees for April rose by 1.0% annualized. Economists predicted an increase of 0.5%. Forex traders can compare this to the Overall Wage Income for Employees for March, which rose by 1.3% annualized.
The forecast for the AUD/JPY turned cautiously bearish amid talks of another multi-billion Forex intervention by the Bank of Japan. The Ichimoku Kinko Hyo Cloud flatlined, with bearish momentum rising, but the Kijun-sen and Tenkan-sen continue to drift higher, suggesting volatility could increase. Traders should also monitor the CCI in extreme overbought territory. A breakdown below 100 could spark a price action reversal. Can bears overpower bulls and force the USD/JPY into its horizontal support area, which engulfs the Senkou Span A of the Ichimoku Kinko Hyo Cloud? 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 92.800 to 93.600 zone, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Short Position
- Entry Level: Short Position @ 93.100
- Take Profit Zone: 90.200 – 90.750
- Stop Loss Level: 94.000
Should price action for the AUD/JPY breakout above 93.600, PaxForex recommends the following trade set-up:
- Timeframe: D1
- Recommendation: Long Position
- Entry Level: Long Position @ 94.000
- Take Profit Zone: 94.650 – 95.000
- Stop Loss Level: 93.600
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