AUD/JPY Bears Set to Dominate Market If Japanese Cash Earnings Goes Up

AUD/JPY – Technical Analysis for Forex Trading & CFDs.

Australia – Cash Rate

Tomorrow, at GMT 3:30 a.m., the Reserve Bank of Australia (RBA) released the official cash rate, which is the interest rate that major Australian banks and financial institutions pay to borrow funds held at the RBA.

Since short-term interest rates are the primary factor in the valuation of the Australian Dollar against other major currencies, Forex traders pay close attention to any changes in the official cash rate.

The RBA left the cash rate at 1.5% in their last meeting and the forecast for this month is that the RBA will leave the cash rate unchanged at 1.5% for the time being.

Japan – Average Cash Earnings

On Friday, at GMT 12:00 am, the Japanese Ministry of Health, Labour and Welfare released the year-over-year average cash earnings, which measures the changes in the total value of employment income collected by workers in the country over the past 12 months.

Since earnings are directly correlated with consumer spending, Forex investors consider a rise in the average cash earnings as a signal that the Japanese consumers will likely increase their spending. As consumer spending makes up a large portion of the Japanese GDP, it can predict the future strength of the Yen.

Last month, the Japanese average cash earnings decreased by -0.6% and the forecast for this month is currently set at a 0.5% increase.

AUD/JPY Forecast

Since the beginning of August, the AUD/JPY has remained bullish, but since the formation of a large bearish bar that pushed the price below the support near 89.30 on September 21, it started a bearish retracement. However, after falling around 230 pips in the last two weeks, the AUD/JPY found a strong support near the 87.90 level.

As the Reserve Bank of Australia is set to keep their overnight cash rate unchanged at 1.5%, but the Japanese average cash earnings figure is expected to increase by 0.5% after coming out at -0.6% last month, we believe it would set a bearish fundamental outlook for the AUD/JPY this week. Therefore, if the AUD/JPY breaks and closes below the support level around 87.90, it would likely attract an additional bearish momentum in the market.

Hence, Australian Forex traders should look out for trading opportunities below this major support level around 87.90.

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

LinkedIn Google+ 

Asif Imtiaz

Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at contact@asifimtiaz.com

Leave a Comment

Risk Warning: Trading in Financial instruments always involves substantial risk of loss and it´s not recommended for all investors or traders ( visit ASIC’s consumer website at www.fido.gov.au for general guidance about investing).
Before deciding to trade foreign exchange you should carefully consider your investment objectives, your experience and risk propensity.
You need to know there is a chance that you can lost some or all of your initial investment therefore you should avoid to invest money that you cannot afford to lose. Read Full Disclaimer

About Us - Sitemap - Contact Us - Disclaimer- Terms & Conditions
DMCA.com Protection Status

© Copyright 2016. All Rights Reserved. Forex Trading.auz.net - Australia Forex Trading Brokers -
ForexTrading.auz.net is owned and operated by Clicking Media Ltd ( company registered in England and Wales, UK )
Australia Office : Level 33, Australia Square, 264 George Street, Sydney, NSW 2000, Australia .
X

Risk Warning: Trading in financial instruments always involves substantial risk of loss and can result in losses that exceed your initial deposit, and it's not suitable for all investors or traders. Read Full Disclaimer

¤