- The AUD/JPY falls more than 0.56% after reaching a maximum of 94.73, unable to keep the profits.
- The bearish surround pattern suggests that the downward pressure is accumulating.
- Key support levels: 93.51 (Senkou Span A), 93.39 (Tenkan-Sen) and 93.00.
The AUD/JPY failed to exceed the resistance level of 94.00 and fell more than 0.56% on Wednesday, after a monthly maximum of 94.73, after an optimistic risk environment and an American inflation report weaker than expected. At the time of writing, the pair was negotiated about 93.90, practically unchanged.
Aud/JPY price forecast: technical perspective
The crossed torque formed a pattern of candle ‘bearish envelope’, suggesting that the Aud/JPy is prepared to test lower prices. However, the relative force index (RSI) remains bullish, but if the RSI falls below its neutral line, the torque could prove the minimum of June 3, 92.04.
If the AUD/JPY falls below Senkou Span A in 93.51, the next level would be the Tenkan-Sen in 93.39, before reaching the level of 93.00.
On the contrary, if buyers recover 94.00, the first resistance would be 95.00. The next key supply zone would be the maximum daily of May 13 at 95.63 before trying at 96.00, and the maximum of February 12, 97.32.
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.
