- The Reserve Bank of Australia (RBA) kept rates unchanged at a record low of 1.5 percent and offered few hawkish or dovish surprises, leaving the bullish technical bias in the AUD/JPY intact.
- The bull flag breakout seen in the AUD/JPY’s 4-hour chart indicates scope for a rally to 84.70 (target as per the measured height method).
- The 50-candle exponential moving average (EMA), 100-candle EMA and the 200-candle EMA are trending north, indicating a bullish setup. The relative strength index of 65 also shows room for a rally toward 84.70.
- The bullish technical setup may fail if the Italian concerns weigh heavily on European equities and put a bid under the Japanese yen.
4-hour chart
Spot Rate: 82.35
Daily High: 82.48
Daily Low: 82.23
Trend: Bullish
R1: 82.51 (Sept. 26 high)
R2: 83.15 (200-day moving average)
R3: 83.26 (July 31 high)
Support
S1: 82.23 (session low)
S2: 81.94 (10-day moving average)
S3: 81.22 (50-day moving average)