3 May 2016
AUD/JPY on the verge of breaking through 80.00 handle
The AUD/JPY broke through April lows and dropped sharply to 80.00 psychological mark after the Reserve Bank of Australia cut interest rates on Tuesday.
The Australian Dollar (AUD) nosedived on Tuesday after the central bank cut interest rates for the first time in a year. RBA lowered its cash rate target by 25bps to a new record low of 1.75%. Analysts were split on whether the central bank would announce a rate-cut but given the record low level of domestic inflation and concerns over Chinese economic slowdown, the rate cut was on the cards sooner rather than later.
Immediately after the announcement, the AUD/JPY pair reversed from the vicinity of 82.00 mark and is currently hovering around 80.00 handle.
Technical levels to watch
From current levels, 2016 daily closing lows support near 80.00-79.90 area could extend some immediate minor support. However, given the intensity of the momentum, the pair seems unlikely to restrict the fall near 80.00-79.90 support. Below this immediate strong support, the pair seems to extend the weakness towards 79.30-25 intermediate support before heading towards retesting 2016 intraday lows support near 77.60-55 area, earlier tested in Feb.
Meanwhile on the upside, attempts of recovery might now face immediate resistance near 80.45-50 area. Should the pair manage to extend its recovery beyond this immediate resistance, any further up-move might now be capped near 81.00-81.10 strong horizontal resistance.
The Australian Dollar (AUD) nosedived on Tuesday after the central bank cut interest rates for the first time in a year. RBA lowered its cash rate target by 25bps to a new record low of 1.75%. Analysts were split on whether the central bank would announce a rate-cut but given the record low level of domestic inflation and concerns over Chinese economic slowdown, the rate cut was on the cards sooner rather than later.
Immediately after the announcement, the AUD/JPY pair reversed from the vicinity of 82.00 mark and is currently hovering around 80.00 handle.
Technical levels to watch
From current levels, 2016 daily closing lows support near 80.00-79.90 area could extend some immediate minor support. However, given the intensity of the momentum, the pair seems unlikely to restrict the fall near 80.00-79.90 support. Below this immediate strong support, the pair seems to extend the weakness towards 79.30-25 intermediate support before heading towards retesting 2016 intraday lows support near 77.60-55 area, earlier tested in Feb.
Meanwhile on the upside, attempts of recovery might now face immediate resistance near 80.45-50 area. Should the pair manage to extend its recovery beyond this immediate resistance, any further up-move might now be capped near 81.00-81.10 strong horizontal resistance.