AUD/JPY Price Analysis: Drops firmly below 90.00 as RBA keeps rates unchanged at 3.60%

The AUD/JPY pair has witnessed an intense sell-off as the Reserve Bank of Australia (RBA) has kept the monetary policy steady. The risk barometer has slipped sharply to near 89.70 and is expected to remain volatile ahead. RBA Governor Philip Lowe has kept the Official Cash Rate (OCR) unchanged at 3.60% as Australian Inflation has shown a quick decline in the past two months.

Australia’s monthly Consumer Price Index (CPI) indicator has softened quickly in the past two months to 6.8% from the peak of 8.4% registered in December. The spell of 10 consecutive rate hikes by the RBA has broken.

Meanwhile, the Japanese Yen has remained subdued amid rising oil prices. This would step-up Japan’s inflation ahead, however, a positive contribution to Japan’s inflation through international forces would only create troubles for Bank of Japan (BoJ) policymakers.

On a four-hour scale, AUD/JPY has sensed selling pressure after reaching near the supply zone placed in a narrow range of 90.19-90.25, around March 15 high. The selling pressure in the Australian Dollar is inspired by steady RBA monetary policy. The 20-period Exponential Moving Average (EMA) at 89.13 is scaling higher, which indicates that the short-term trend is bullish.

Meanwhile, the Relative Strength Index (RSI) is oscillating in the bullish range of 60.00-80.00, which indicates that the upside momentum is already active.

The Aussie Dollar would see more weakness if it would slip below the immediate support of 89.60. An occurrence of the same would expose the risk barometer to March 29 high at 88.70. A further breakdown would drag the cross toward March 28 low at 87.15.

On the flip side, a decisive move above April 04 high at 90.14 will drive the cross toward March 08 high at 90.92 followed by March 03 high at 92.25.

AUD/JPY four-hour chart