Forex world

November 30, 2022

AUD/JPY seesaws near 200-DMA

- AUD/JPY struggles to extend the previous day’s recovery, sidelined of late.

- Australia’s Monthly CPI dropped to 6.9% YoY in October.

- Clear downside below seven-week-old ascending trend line, 50-DMA keeps sellers hopeful.

- Buyers need to cross monthly resistance line to retake control.

AUD/JPY seesaws near 92.75, printing mild losses during early Wednesday after downbeat Australia inflation data. Even so, the cross-currency pair remains sidelined as traders remain cautious ahead of the key data/events.

Australia's Monthly Consumer Price Index (CPI) dropped to 6.9% YoY versus 7.4% expected and 7.3% prior. The inflation numbers defend the Reserve Bank of Australia’s (RBA) dovish bias and should have weighed on the AUD/JPY prices.

However, anxiety ahead of Federal Reserve (Fed) Chairman Jerome Powell’s first public appearance since the November Federal Open Market Committee (FOMC) meeting seems to challenge the traders, as well as a slew of data from China, Europe and the US.

Amid these plays, the S&P 500 Futures print mild losses after a mixed closing of Wall Street whereas the US 10-year Treasury bond yields ended Tuesday on a firmer footing, up six basis points (bps) to 3.748%, remain sidelined near the same at the latest.

Moving on, China’s official activity data for November could offer immediate directions but the major attention will be given to Powell amid hawkish concerns, which in turn could weigh on the market’s risk appetite and the AUD/JPY prices.

Technical analysis

AUD/JPY remains indecisive while making rounds to the 200-DMA during early Wednesday, struggling to justify the downbeat signals from Australia amid cautious market sentiment.

Even so, the cross-currency pair’s sustained trading below the previous support line from October 13 and the 50-DMA, around 93.70 by the press time, keeps the AUD/JPY bears hopeful. Also favoring the sellers are the bearish MACD signals and downbeat RSI, not oversold.

That said, the latest low surrounding 92.15 and the 92.00 round figure could restrict the AUD/JPY pair’s immediate downside ahead of the previous monthly bottom of 90.84.

Alternatively, a convergence of the previous support line and the 50-DMA near 93.70 holds the key for the pair buyer’s entry. Additionally challenging the AUD/JPY bulls is the descending resistance line from October 21, close to 94.10 at the latest.

Overall, AUD/JPY remains on the bear’s radar despite the latest data from Australia and China.

Trend: Further downside expected

AUD/JPY: Daily chart

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