AUDJPY Flashes a Bearish Signal

PrimeXBT would like to call your attention to a professional analysis overview of AUDJPY.

Japanese inflation, as represented by the consumer price index (CPI), rose 0.5% year-on-year in November, beating the expected rise of 0.2% by a large margin.

The core CPI, which excludes food and energy prices, rose 0.8% in November from a year earlier, compared to an expected rise of 0.6% following October’s 0.7% uptick.

While inflation bettered estimates, it remained well below the Bank of Japan's (BOJ) 2 percent price objective and is failing to draw bids for the Yen.

Years of massive stimulus program have failed to accelerate inflation and has left the BOJ with low ammunition to combat the next round of recession or economic slowdown.

As we head into 2020, there are concerns over the repo market, despite the FED pumping billions into it for the new year. So, be mindful that we could see bouts of volatility across markets if a funding squeeze occurs. Remember, it was early January that we saw the Yen flash crash. If the FED does manage to keep the issues contained, AUD/JPY could be off to a bright start to the year.

In the near term, the Relative Strength Index on the AUDJPY chart is flashing signs of bearish divergence, and some growth is expected until it reaches the resistance lines. Once its price reaches these lines, a rejection could cause it to drop until it reaches its support level, which could spark a bounce.


Support Level: 74.822
Resistance Zone: 76.46 — 76.7
Day's Range: 76.026 — 76.54


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