- AUD/JPY drops 0.15%, quoting about 92.28 after reaching an intradic maximum of 92.83.
- Despite the weak impulse, the pair remains above the Ichimoku cloud, pointing out a possible base.
- Bulls need to break over 92.83 for the rise; The key support is located in the 91.70/80 zone.
The Australian dollar (AUD) continues to lose ground against Japanese Yen (JPY) late on Thursday, depreciating more than 0.15% amid a risk appet. The decision of the Bank of the Australian Reserve (RBA) to cut rates at the beginning of the week continued to weigh on the Australian dollar, which fails to find its form. The AUD/JPY is quoted at 92.28 after reaching a daily maximum of 92.83.
Aud/JPy Price forecast: Technical Perspective
After reaching a weekly maximum of 93.83, the AUD/JPY fell for three consecutive days, retreating in anemic negotiation ranges of an average of 50 pips per day. However, the operators failed to push the torque below the cloud of Ichimoku (Kumo), suggesting that there could be a background ahead.
For a bullish continuation, the AUD/JPY needs to overcome the maximum of May 21 in 92.83. A rupture of this last will expose 93.00, followed by Tenkan-sen in 93.81. Once surpassed, the next stop would be 94.00.
On the contrary, the AUD/JPY needs to fall below the top of the Kumo in 91.70/80. Once that area was clear, the following support would be the Senkou Span B in 90.88.
Aud/JPy – Diario 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.
