The cross in AUD/JPY staged a solid comeback following the release of the RBA’s monetary policy meeting minutes, now driving the rate to test 88 handle.
AUD/JPY cheer RBA minutes
The bulls found fresh bids at the mid-point of 87 handle and from there rallied almost 50-pips after the RBA minutes showed an upbeat assessment of the economy, citing that the steady policy stance remains consistent with growth and inflation targets.
However, it remains to be seen if the cross can take on the recovery well above 88 handle amid persisting risk-aversion, triggered by negative Asian equities and Trumpcare bill debacle, while a drop in China’s new home prices data for June could also keep the gains limited in the cross.
Focus now shifts towards the second-liner economic releases from the US docket for fresh incentives on the US dollar, eventually impacting both the AUD and JPY.
Higher side: 88.27 (multi-month tops), 88.50 (psychological levels), 88.74 (classic R3)
Lower side: 87.50 (daily low), 87.32 (10-DMA), 86.65 (20-DMA)
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