FxWirePro: AUD/JPY extends bearish gap open, slips below 55-EMA ahead of RBA policy meet

Chart - Courtesy Trading View 

AUD/JPY was trading 0.41% lower on the day at 91.49 at around 12:03 GMT, bias is bearish.

The pair is extending the bearish gap open and has slipped below 55-EMA support, raising scope for further weakness. 

Aussie undermined as Beijing disappointed markets by setting a modest economic growth target for this year.

Chinese authorities, earlier on Monday, set a modest economic growth target for 2023 of around 5%, denting the antipodeans. 

Investors also await the Reserve Bank of Australia’s (RBA) policy decision on Tuesday, where it is expected to raise interest rates by another 25 basis points.

Last month, the RBA delivered a 25bps hike, lifting the cash rate by an aggregate of 325 basis points since May 2022 and bringing borrowing costs to a 10-year high of 3.35%.

On the other side, Yen strengthened ahead of the final policy meeting on Friday for Bank of Japan Governor Haruhiko Kuroda.

Further, Bank of Japan Governor nominee Ueda doubled down on the importance of the bank’s ultra-easy monetary policy stance, which could keep the yen under pressure.

Support levels - 90.72 (55-week EMA), 90.57 (Cloud top)

Resistance levels - 91.62 (55-EMA), 91.78 (5-DMA)

Technical Summary: AUD/JPY trades with a bearish bias. Price action has slipped below 55-EMA and 200H MA, poised for further downside. Momentum is bearish, GMMA indicator shows major and minor trend are bearish on the intraday charts. 

The pair is on track to test cloud support. break below cloud will see dip till trendline support at 89.60.