Chart - Courtesy Trading View
Australian business investment rose to a 7-year high in Q4, pointing to a still healthy expansion in the economy late last year despite aggressive tightening.
Australia private capital expenditure data showed growth of 2.2% q/q over 4Q 2022 beating the 1.0% forecasts. The prior quarter was also revised up to 0.6% from -0.6%
Australian government bonds edges lower, with the yield on three-year and the 10-year bonds rising 5 bps to 3.606% and 3.903% respectively.
Also, a modest recovery in the global risk sentiment, tends to undermine the safe-haven Japanese Yen (JPY). Caution seen ahead of BoJ Governor candidate Ueda's testimony on Friday.
Technical Analysis:
- AUD/JPY was trading 0.24% higher on the day at 91.98 at around 10:30 GMT
- The pair has snapped at 2-day downside and has bounced off 21-EMA support
- Momentum is still with the bulls and volatility is high and rising
- Price action has shown a decisive break above cloud and is currently capped below 200-DMA
- GMMA indicator shows major and minor trend are neutral on the daily charts
Support levels:
S1: 91.76 (21-EMA)
S2: 90.65 (55-week EMA)
Resistance levels:
R1: 92.29 (200H MA)
R2: 93.07 (200-DMA)
Summary: AUD/JPY finds series of strong supports till 91.60 level. Decisive break above cloud keeps scope for more gains. Bullish invalidation below 55-EMA. On the flip side, break out above 200-DMA will propel the pair higher.
