- AUD/JPY has printed 5.5-week lows this Friday morning in Asia, bolstering bearish chart setup.
- Aussie will likely take a beating if Australia’s building approvals reverse 19.1% rise seen in February.
AUD/JPY is on the slippery floors, having printed a 5.5-week low of 77.94 a few minutes before press time.
The currency pair created a bearish lower high at the resistance at 78.76, which is the 61.8% Fibonacci retracement of the rally from 77.54 to 80.72, earlier this week and now appears on track to revisit the low of 77.54 registered on March with the 5- and 10-day moving averages (MAs) trending south.
The bearish setup would be bolstered if the Aussie housing data due at 01:30 GMT, prints below estimates, putting pressure on the Reserve Bank of Australia (RBA) to lower interest rates. After all, there is a tight correlation between the property market and consumer spending power and the markets are already busy gauging whether the rate cut would come through next week.
The building permits are forecasted to drop 14% month-on-month in March. It is worth noting that approvals had risen by 19.1% in February, triggering speculation that the housing/property market may have bottomed out. The big spike, however, was from a low base.
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