AUD/JPY downtrend extended to four-straight days on Australia’s soft inflation data

AUD/JPY records a decline for the fourth consecutive day, currently trading at 97.37, a slight drop of 0.05%.
The Australian Bureau of Statistics reports a slowdown in inflation, with the Consumer Price Index (CPI) rising by 4.9% in October, less than the anticipated 5.2%.
AUD/JPY traders eye Japanese Industrial Production, Retail Sales and Consumer Confidence.

Christian Borjon Valencia FXStreet

The AUD/JPY extended its losses for the fourth straight trading day, due to overall Aussie’s Dollar (AUD) weakness, as the latest inflation report showed substantial progress. Hence, traders scale back tightening prospects by the Reserve Bank of Australia (RBA). At the time of writing, the AUD/JPY is trading at 97.37, down 0.05% in early Thursday’s Asian session.

Lower-than-expected inflation data in Australia leads to reduced expectations for RBA tightening, a headwind for AUD/JPY

On Wednesday, the Australian Bureau of Statistics (ABS) revealed the monthly Consumer Price Index (CPI) rose by 4.9% in October, slower than the 5.6% increase in September, below forecasts of 5.2%. Monthly based, CPI slid 0.3%, blamed on lower petrol prices.

Sources cited by Reuters noted, “The lower-than-expected October print is an early Christmas present for households and businesses... That should be enough to save the Reserve Bank Board from having to be the Grinch of Christmas when it meets next week.”

Early in the month, the Reserve Bank of Australia (RBA) decided to lift interest rates from 4.10% to 4.35% due to higher inflation levels. The RBA left the door open for further tightening, if necessary, to achieve its 2 to 3% inflation target.

Money market futures linked to the RBA’s monetary policy see the central bank holding policy steady, though there’s a 50% chance of a rate hike in the first half of 2024.

On the Japanese front, the economic docket would reveal a speech of the Bank of Japan (BoJ) official Nakamura and release of Industrial Production data, Retail Sales, and Consumer Confidence.

AUD/JPY Price Analysis: Technical outlook

The pair has formed a double top, achieving four straight days of losses, with the AUD/JPY drifting more than 100 pips of losses since reaching a weekly high of 98.49. Additionally, last Wednesday's CPI report was the catalyst to push prices below the Tenkan-Sen line at 97.68, which has exacerbated a drop toward 97.39, with sellers targeting the Senkou Span A at 97.04. Further downside risks lie below the November 21 swing low of 96.82, like the Kijun-Sen at 96.41.

AUD/JPY

Overview
Today last price	97.38
Today Daily Change	-0.62
Today Daily Change %	-0.63
Today daily open	98

Trends
Daily SMA20	97.37
Daily SMA50	96.02
Daily SMA100	95.18
Daily SMA200	93.34

Levels
Previous Daily High	98.38
Previous Daily Low	97.88
Previous Weekly High	98.54
Previous Weekly Low	96.83
Previous Monthly High	96.42
Previous Monthly Low	93.05
Daily Fibonacci 38.2%	98.07
Daily Fibonacci 61.8%	98.19
Daily Pivot Point S1	97.8
Daily Pivot Point S2	97.59
Daily Pivot Point S3	97.3
Daily Pivot Point R1	98.29
Daily Pivot Point R2	98.59
Daily Pivot Point R3	98.79

Author

Christian Borjon Valencia

FXStreet

Markets analyst, news editor, and trading instructor with over 14 years of experience across FX, commodities, US equity indices, and global macro markets.

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