AUD/JPY trades around 83.50, RBA Ellis speech eyed

AUD/JPY is trading around 83.50 during the Asian session on Monday, as the gross domestic product (GDP) data of Japan's July-September quarter disappoints. Further, upbeat Chinese Retail Sales and Industrial Production data underpin the sentiment around the aussie. 

Last week currency markets were choppy, with the US dollar marginally softer and AUD crosses firming. A stable risk appetite is expected to support the AUD/JPY in the near term.

Japan's Q3 GDP contracted 3.0% annually and the quarterly figure dropped by 0.8%, worse than economists' estimate of a 0.2% contraction. The data added that private consumption, which makes up more than half of the economy, fell 1.1%, versus a 0.5% decline expected by economists.

Putting this aside, Japan's wholesale inflation is at a four-decade high but Bank of Japan (BoJ) policymakers opined that inflationary pressures arising from higher energy prices are moderate. Iterated monetary policy easing should be upheld.

The US market is giving out mixed signals of late; besides China Retail Sales and Industrial Production data Joe Biden and Xi Jinping, virtual summit on Monday will be watched by the pair's investor. The meet is intended to halt or slow down the downward spiral in US-Chinese relations.

Long-end Treasury yields ended marginally higher in a relatively subdued session. For local rates markets, the focus this week will be on Reserve Bank of Australia (RBA) Governor Philip Lowe speech Tuesday and the Q3 wages data later in the week.

Looking ahead, the RBA thinks the cash rate may stay where it is until 2024, while the market is assessing a rate hike move as early as mid-2022. RBA Governor Lowe is expected to iterate the recent trends in inflation and also emphasize how Australia's inflation experience differs from that of other countries. But as per experts, the market is likely to largely ignore what he has to say until the Q3 Wage Price Index comes out on Wednesday.

This week, the risk-sensitive pair will find impetus from multiple factors, starting from Australia's Home Sales MoM, October and RBA Assistant Governor Luci Ellis's speech. 

AUD/JPY technical levels

As per the daily chart, AUD/JPY faces resistance at 21-day Simple Moving Average (SMA), 84.67. The next barrier to the upside is 86.26, it's a monthly high. The other resistance up north will be the phycological level 87.00. 

The price may reverse to continue downward, where it can meet 200-day SMA, 82.89 for support. The following support 82.63 can be tested, it's a 50-day SMA. Further south, 100-day SMA, 81.89, is the last support. 

AUD/JPY additional levels