- AUD/JPY trades near 79.20 at the initial Tuesday trading.
- The pair recently dropped as investors turned cautious ahead of the RBA.
- 79.00 acts as immediate support with 79.85 being nearby resistance.
AUD/JPY trades around 79.20 during early Asian sessions on Tuesday. The pair has been little changed since morning as investors await the Reserve Bank of Australia (RBA) rate statement, up at 03:30 GMT. The AUD/JPY pair recently dropped as global risk sentiments turned sour after investors doubt successful trade deal between the US and China. Adding to the pessimism was a decline in equities.
In spite of witnessing upbeat news favoring the US-China trade accord, investors started doubting the pact as there was no update about China’s readiness to accept the US demand concerning structural overhaul. Equities also turned negative by the day-end and added strength to the pessimism.
Aussie traders remained on back-foot during early-Tuesday as they await monetary policy meeting outcome from the RBA. The central-bank flip-flopped AUD bulls’ mood during their latest communications and hence increased the importance of today’s announcement.
While no change is expected to roll out in the central bank’s key cash rate, market players will pay close attention to the rate statement in order to get clues about the economic strength and future policy guidance.
On this aspect, TD Securities says, “The RBA will not be privy to Wed’s Q4 GDP outcome. Although the risks to the RBA’s implied 0.6%/q forecast is to the downside, a cut by April or May appears unlikely given the medium term emphasis. We pay May OIS at 1.4525%, target 1.50%, stop 1.42%, A$50k/bp.”
AUD/JPY Technical Analysis
Should RBA disappoints Aussie buyers and drag the pair under 79.00 trend-line support that connects February lows, the pair may drop to 78.70 whereas 50-day simple moving average (SMA) at 78.35 could restrict further declines.
On the upside, 100-day SMA level of 79.85 continues to become a tough resistance for the pair before it can rise to 80.00 and 80.70 numbers to the north.
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