AUD/JPY cross extended gains to a four-day high of 80.23 after the Reserve Bank of Australia (RBA) held key rates unchanged as expected.
Sits above 200-DMA
At the time of writing, the cross was trading above the 200-DMA level of 80.07. Caution ahead of the RBA meet was keeping buyers on the sidelines even though the data released earlier today showed improvement in the China manufacturing activity.
Hence, the bird rose above 200-DMA once the RBA was out of the way. The policy statement offered little hawkish/dovish surprises. The Bank of Japan (BOJ) also left interest rates unchanged as expected, but revise its inflation forecasts lower.
AUD/JPY Technical Levels
The cross was last seen trading around the session high of 80.23. Break above 80.31 (previous month’s high) would open up upside towards 81.00 (zero figure), above which a major hurdle is noted directly at 81.89 (monthly 200-MA). On the other hand, a breakdown of support at 79.61 (23.6% of Nov 2014 high – June 2016 low) would shift risk in favor of a drop to 78.58 (monthly 5-MA) and 78.00 (zero figure) levels.
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