- AUD/JPY attracts heavy selling following the release of softer domestic GDP growth figures.
- A slightly oversold RSI on the daily chart prompts intraday short covering around the cross.
- Bets for an early RBA rate cut and December BoJ rate-hike expectations should cap the upside.
The AUD/JPY cross dropped to its lowest level since September 18 during the Asian session on Wednesday as softer Australian GDP print lifted bets for an early interest rate cut by the Reserve Bank of Australia (RBA). Moreover, expectations that the Bank of Japan (BoJ) will hike interest rates again in December contribute to the Japanese Yen's (JPY) relative outperformance and exert additional pressure on the currency pair.
Spot prices, however, managed to rebound over 70 pips from sub-96.00 levels and currently trade around 96.70, down 0.20% for the day. The Relative Strength Index (RSI) on the daily chart is flashing slightly oversold conditions and turns out to be a key factor that prompts some short-covering around the AUD/JPY cross. That said, the technical setup warrants caution before positioning for any further gains.
Last week's breakdown below the 98.00 round figure was seen as a key trigger for bearish traders. Furthermore, oscillators on the daily chart are holding deep in negative territory. This, in turn, suggests that any subsequent move up could be seen as a selling opportunity ahead of the 97.00 mark and cap the AUD/JPY cross near the 97.50 horizontal barrier. The latter might now act as a key pivotal point for short-term traders.
On the flip side, the 96.00 round figure might continue to offer some support. A convincing break and acceptance below the said handle will reaffirm the negative outlook and pave the way for deeper losses. The AUD/JPY cross might then slide to the next relevant support near the 95.30 region en route to the 95.00 psychological mark. The downfall could eventually drag spot prices to the 94.45-94.40 horizontal support and the 94.00 mark.
AUD/JPY daily chart
Economic Indicator
Gross Domestic Product (YoY)
The Gross Domestic Product (GDP), released by the Australian Bureau of Statistics on a quarterly basis, is a measure of the total value of all goods and services produced in Australia during a given period. The GDP is considered as the main measure of Australian economic activity. The YoY reading compares economic activity in the reference quarter compared with the same quarter a year earlier. Generally, a rise in this indicator is bullish for the Australian Dollar (AUD), while a low reading is seen as bearish.
Read more.Last release: Wed Dec 04, 2024 00:30
Frequency: Quarterly
Actual: 0.8%
Consensus: 1.1%
Previous: 1%
Source: Australian Bureau of Statistics
The Australian Bureau of Statistics (ABS) releases the Gross Domestic Product (GDP) on a quarterly basis. It is published about 65 days after the quarter ends. The indicator is closely watched, as it paints an important picture for the economy. A strong labor market, rising wages and rising private capital expenditure data are critical for the country’s improved economic performance, which in turn impacts the Reserve Bank of Australia’s (RBA) monetary policy decision and the Australian dollar. Actual figures beating estimates is considered AUD bullish, as it could prompt the RBA to tighten its monetary policy.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to gains near 1.0950 on US Dollar weakness
EUR/USD stays in positive territory near 1.0950 on Tuesday as the US Dollar (USD) struggles to find demand. The recovery in risk sentiment undermines the haven demand for the USD, lifting the pair. Dovish Fed expectations also weigh negatively on the Greenback. Markets await tariff headlines.
GBP/USD recovers toward 1.2800 on improving risk mood
GBP/USD holds its ground and edges higher toward 1.2800 in the second half of the day on Tuesday. The pair draws support from renewed US Dollar weakness and a positive shift in risk sentiment but US President Trump's tariff war and global growth concerns could limit its upside.
Gold bounces back above $3,000 as trade war tensions flair up
Gold price is bouncing higher in tandem with equities after another stellar nosedive move on Monday. The precious metal trades above the $3,000 to start the American session. The bounce is supported by a technical element on the one hand and a geopolitical driver on the other.
Who is Satoshi? Crypto lawyer sues DHS to reveal Satoshi Nakamoto's identity
James Murphy, a cryptocurrency lawyer popularly known to his followers on X as "MetalLawMan," has filed a lawsuit in a D.C. District Court against the Department of Homeland Security (DHS). He intends to uncover the real face or faces behind Satoshi Nakamoto, the pseudonymous creator of Bitcoin.
The Fed is looking at a hefty price level
We are still in thrall to tariffs, the faux-macro “data” driving markets. The WSJ editorial board advised other countries to take their tariffs to zero so that Trump’s “reciprocal” tariffs will have to be zero, too. Cute, but no cigar.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.