FxWirePro: AUD/JPY Daily Outlook

Chart - Courtesy Trading View 

Spot Analysis:

AUD/JPY was trading 0.22% lower on the day at 81.18 at around 05:15 GMT.

Previous Week's High/ Low: 82.97/ 81.49

Previous Session's High/ Low: 81.82/ 80.69

Fundamental Overview:

Australia Q4 inflation data came in stronger than expected during early Tuesday.

Australia’s Q4 CPI rose more than 1.0% forecast and 0.8% QoQ to 1.3% while the YoY figures crossed the RBA's SOMP projections to 3.5%, versus 3.2% expected and 3.0% prior. 

The RBA Trimmed Mean CPI crossed 0.7% market consensus with 1.0% figures on QoQ while also rising past 2.4% YoY forecast to 2.6%.

Further, National Australia Bank’s (NAB) Business Confidence figures for December dropped to -12 versus 16 forecast whereas the Business Conditions eased to 8 from 12.

The risk-off mood, amid pre-Fed woes and Russia-Ukraine tensions, keeps the safe-haven yen in demand, weighing the pair lower. 

Technical Analysis:

- AUD/JPY is extending downside for the 4th consecutive week

- Price action has slipped below the daily cloud and Chikou span is biased lower

- MACD and ADX support downside in the pair

- Momentum is strongly bearish, Stochs and RSI are biased lower

- Volatility is high and rising GMMA indicator show minor trend is strongly bearish

Major Support and Resistance Levels:

Support - 80.00 (110-week EMA), Resistance - 81.78 (5-DMA)

Summary: AUD/JPY is poised for further downside. Scope for test of major trendline support at 79.30. Bearish invalidation only above 200-DMA.