AUD/JPY has recently made a strong break above a key resistance area but is showing signs of retreating before being able to resume its online currency trading climb. Price could bounce off the Fibonacci retracement levels marked on this 4-hour forex time frame then retest the recent highs.
Going long at the current levels with a stop at the next Fibonacci retracement level or below the 96.00 handle could yield a high return on risk for a day trade if one aims for the previous highs.
Online Currency Trading AUD/JPY Forecast
Risk appetite has been lifting the higher-yielding commodity currencies so far in the past few days, much to the detriment of the lower-yielding Japanese yen. With that, AUD/JPY could carry on with its online forex trading climb after gathering more buyers at the 96.00 levels.
Earlier this week, the RBA gave a less dovish than expected monetary policy statement. Although the central bank refrained from tightening and announced that it plans to keep rates on hold for much longer, the currency rallied when Governor Stevens highlighted the improvements in the Australian economy. On the other hand, the Japanese yen was placed on a weak footing when the Tankan survey printed weaker than expected results in both manufacturing and non-manufacturing industries.
This opens up the possibility of further BOJ easing. Recall that Governor Kuroda emphasized that the Japanese economy is resilient but that they would not hesitate to dole out stimulus if needed. Further weakness in the Japanese economy could eventually force the BOJ to add stimulus if the economy is unable to weather the effects of the sales tax hike.
The pickup in the Chinese manufacturing industry could prove to be positive for the Australian dollar, as higher imports from their largest trade partner could be good for the commodity-driven nation and the performance of AUD in the online currency trading market.
To contact the reporter of the story: Samuel Rae at email@example.com