Sunday, June 23, 2024

AUD/JPY Price Analysis: Rallies and paired last week’s losses, set to assault 94.00

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The AUD/JPY trimmed last week’s losses and is gaining 2.37% in the week.
The market mood improved once US central bank chief Jerome Powell pushed against aggressive rate hikes as US equities cheered the move, closing in the green.
AUD/JPY Price Forecast: Paired last week’s losses and ready to launch a retest of the YTD high near 96.00

The Australian dollar finally rallied vs. the Japanese yen, spurred by an upbeat market mood, courtesy of the US central bank, as the Fed hiked rates 50-bps. At the same time, its Chief Jerome Powell emphasized that 75-bps are not “on the table” in subsequent meetings. At 93.80, the AUD/JPY illustrates the strength of the uptrend after rallying from 92.20s to 93.80s.

Asian equity futures to open strong amidst an upbeat sentiment

Sentiment-wise, investors’ mood is cheerful. US equities rallied, supported by Jerome Powell, and finished with gains between 2.81% and 3.41%. Meantime, Asian stock futures look set to open higher despite China’s coronavirus crisis. The Ukraine-Russia conflict appears to last longer than estimated but has taken the backseat as traders remain turned to the global central bank’s monetary policy decisions.

However, news across the wires reported the reiteration of Russia that Kyiv desire to withdraw from the negotiation process, according to Al Jazeera. Meanwhile, Euro area countries proposed a ban on Russian oil, which would be effective in six months with no gradual phase-out, as reported by Reuters.

AUD/JPY Price Forecast: Technical outlook

The AUD/JPY’s Wednesday’s price action finally broke above a 10-day old downslope resistance trendline, a signal for AUD/JPY bulls to pull the trigger and push prices higher. However, recent statements by the Japanese Minister of Finance kept investors at bay from opening fresh longs in the pair; but Fed Chair Powell gave the greenlight, pushing back against 75-bps increases. Consequently, the AUD/JPY rallied and pared last week’s gains around 93.83, Wednesday’s daily high.

With that said, the AUD/JPY remains set for a renewed test of 2022 YTD highs. The AUD/JPY first resistance would be 94.00. A breach of the latter would expose the March 28 swing high at 94.32, followed by the 95.00 figure. Once cleared, the next ceiling level would be the YTD high at 95.74.

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