Inflation Jitters: AudJPY Awaits US Data

The AUDJPY pair experienced a modest upward movement amid market anticipation of the U.S. inflation report after gaining 0.65% in the Monday trading session. The Australian dollar marked its 40th anniversary, demonstrating its historical value as a stable currency in times of economic fluctuation. However, Australian consumer sentiment slumped, reflecting challenges posed by rising living costs and interest rates. The RBA’s cautious approach and doubts about further rate hikes in Australia influence this currency’s outlook. 

Producer prices in Japan rose 0.3% year-on-year in November, indicating easing inflationary pressures. The data arrived below expectations but marked the eleventh consecutive month of slowing producer price growth. This trend could support the Bank of Japan’s dovish stance, potentially limiting the upside for the Japanese Yen and benefiting the AUDJPY pair. 

However, the upcoming central bank decisions from the Federal Reserve, European Central Bank, and Bank of England could significantly impact market sentiment and influence the AUDJPY’s trajectory. 

Technical Analysis: 

The AUDJPY is currently locked in a short-term battle between the bulls and bears, trading flat around 95.861. Price action hovers below the downward-sloping 50-SMA and 100-SMA, suggesting a potential resistance zone. However, a recent breakout above the 20-SMA indicates a possible shift in momentum towards the upside. 

The RSI value of 48.68 suggests relative neutrality in the market, potentially indicating a period of consolidation before a breakout.  

A sustained push above the 20-SMA and initial resistance at 96.156 could pave the way for a bullish momentum towards 96.611 and 97.026. Conversely, failure to surpass the resistance zone may present short-term trading opportunities towards 95.454, with further declines potentially reaching 95.069 and 94.644. 


T The AUDJPY pair remains in a technically uncertain state. While the recent bullish technical signals offer some encouragement, the overall market sentiment and upcoming economic events will significantly influence the pair’s short-term direction. 

A successful break above the 96.156 resistance level could signal a bullish trend towards higher resistances. Conversely, failure to surpass key resistance might create short-term opportunities for bearish moves towards the 95.454 and 95.069 significant support levels. 

Sources: TradingView, Trading Economics, Reuters, Dow Jones Newswire, MT Newswire. 

Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst 

Disclaimer: Trive South Africa (Pty) Ltd, Registration number 2005/011130/07, and an Authorised Financial Services Provider in terms of the Financial Advisory and Intermediary Services Act 2002 (FSP No. 27231). Any analysis/data/opinion contained herein are for informational purposes only and should not be considered advice or a recommendation to invest in any security. The content herein was created using proprietary strategies based on parameters that may include price, time, economic events, liquidity, risk, and macro and cyclical analysis. Securities involve a degree of risk and are volatile instruments. Market and economic conditions are subject to sudden change, which may have a material impact on the outcome of financial instruments and may not be suitable for all investors. When trading or investing in securities or alternative products, the value of the product can increase or decrease meaning your investment can increase or decrease in value. Past performance is not an indication of future performance. Trive South Africa (Pty) Ltd, and its employees assume no liability for any loss or damage (direct, indirect, consequential, or inconsequential) that may be suffered from using or relying on the information contained herein. Please consider the risks involved before you trade or invest.