Hawkish pause? Who she?

In case you missed it, the Reserve Financial institution of Australia (RBA) simply determined to maintain its rates of interest at 4.10%, stunning some merchants who had priced in one other 25bps fee hike.

Whereas the central financial institution maintained that “some additional tightening of financial coverage could also be required,” RBA members had been extra interested by having the “time to evaluate the state of the economic system and the financial outlook.” In addition to, RBA additionally famous that inflation has “handed its peak.” Phew!

AUD/JPY 15-min Foreign exchange Chart by TV

AUD dropped sharply and extensively on the information, however extra consumers jumped in shortly after.

AUD/JPY, for instance, dropped to the S1 (96.10) of at this time’s Pivot Factors when the RBA dropped its assertion but in addition returned to the 96.50 minor psychological deal with earlier than the beginning of the European session buying and selling.

Does this imply that there are extra AUD/JPY consumers than sellers?

Ehhhhh. Not precisely.

For one factor, AUD/JPY remains to be having hassle breaking above the 96.60 excessive that it had been knocking on all week.

The most recent candlesticks additionally level to some extra resistance across the pair’s present costs.

AUD/JPY breaking or bouncing from 96.60 will probably depend upon this week’s market atmosphere.

On one hand, the RBA’s fee hike pause, Uncle Sam’s weaker manufacturing PMIs, and OPEC+ and Russia’s further output cuts all underscore world demand considerations that might drag “threat” property like AUD decrease.

However, the FOMC assembly minutes scheduled this week might remind merchants of the Fed’s hawkish biases and push USD/JPY larger and take AUD/JPY with it.

Let’s see how AUD/JPY reacts to its July resistance.

I’m leaning extra in the direction of promoting as a result of, on prime of world demand considerations, Financial institution of Japan (BOJ) officers have additionally hinted that they’re uncomfortable with JPY’s current weaknesses.

If AUD/JPY will get rejected at 96.60 and stays under the development line that we’ve marked, then the pair might drop to its lows close to 96.10. It might even make new lows and hit the 96.00 psychological degree!

New weekly highs, nevertheless, might push AUD/JPY to the R1 (96.74) space if not the 97.00 space of curiosity from mid-June.

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