- The Aud/JPy prints maximum and minimum higher; The bullish wrapping candle pattern supports the rise.
- A daily closure above 94.00 could open the way to 95.63, 97.32 and the maximum of the year to date at 99.15.
- The inability to maintain 93.00 can trigger a fall around 92.00 and the Senkou Span B support in 90.83.
The Aud/JPY extended its profits on Thursday and rose more than 0.76% in the midst of a risk impulse caused by the news that the US and China could reach an agreement, since President Trump spoke with Chinese President Xi Jinping during the day. At the time of writing, the pair is negotiated at 93.30.
Aud/JPY price forecast: technical perspective
The AUD/JPY has a bullish bias, since the torque has formed a series of higher and higher minimums, indicating that buyers are gaining impulse. In addition, the price action during the last two days of negotiation formed a sailing pattern ‘Alcista Envante’, providing the traders for two technical reasons why the torque is inclined to the rise.
For a bullish continuation, the AUD/JPY needs a daily closure above 94.00; If it is exceeded, the next stop will be the maximum of May 13, 95.63, followed by the maximum of February in 97.32, before the maximum of the year to date (YTD) of 99.15, the peak of January 7.
On the contrary, if the AUD/JPY falls below 93.00, a fall that challenges the minimum of May 30, 92.00 is expected; A fall to Senkou Span B at 90.83 is in the letters.
AUD/JPY – DIARY PRICE GRAPH
Faqs Australian dollar
One of the most important factors for the Australian dollar (Aud) is the level of interest rates set by the Australian Reserve Bank (RBA). Since Australia is a country rich in resources, another key factor is the price of its greatest export, iron mineral. The health of the Chinese economy, its largest trading partner, is a factor, as well as inflation in Australia, its growth rate and commercial balance. The feeling of the market, that is, if investors are committed to more risky assets (Risk-on) or seek safe shelters (Risk-Off), it is also a factor, being the positive risk-on for the AUD.
The Australian Reserve Bank (RBA) influences the Australian dollar (AUD) by setting the level of interest rates that Australian banks can lend to each other. This influences the level of the interest rates of the economy as a whole. The main objective of the RBA is to maintain a stable inflation rate of 2% -3% by adjusting the interest rates or the low. Relatively high interest rates compared to other large central banks support the AU, and the opposite for the relatively low. The RBA can also use relaxation and quantitative hardening to influence credit conditions, being the first refusal for the AU and the second positive for the AUD.
China is Australia’s largest commercial partner, so the health of the Chinese economy greatly influences the value of the Australian dollar (Aud). When the Chinese economy goes well, it buys more raw materials, goods and services in Australia, which increases the demand of the AU and makes its value upload. The opposite occurs when the Chinese economy does not grow as fast as expected. Therefore, positive or negative surprises in Chinese growth data usually have a direct impact on the Australian dollar.
Iron mineral is the largest export in Australia, with 118,000 million dollars a year according to data from 2021, China being its main destination. The price of iron ore, therefore, can be a driver of the Australian dollar. Usually, if the price of iron ore rises, the Aud also does, since the aggregate demand of the currency increases. The opposite occurs when the price of low iron ore. The highest prices of the iron mineral also tend to lead to a greater probability of a positive commercial balance for Australia, which is also positive for the AUD.
The commercial balance, which is the difference between what a country earns with its exports and what it pays for its imports, is another factor that can influence the value of the Australian dollar. If Australia produces highly requested exports, its currency will gain value exclusively for the excess demand created by foreign buyers who wish to acquire their exports to what you spend on buying imports. Therefore, a positive net trade balance strengthens the AUD, with the opposite effect if the commercial balance is negative.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
