AUD/JPY Bearishness May Continue if Japanese Household Spending Rebounds

AUD/JPY – Technical Analysis for Australian Binary Options Brokers

Australia – Consumer Price Index

On Wednesday, at GMT 1:30 a.m., the Australian Bureau of Statistics will release the quarter-over-quarter consumer price index (CPI) figure that measures the changes in the price of goods and services bought by Australian consumers in the last quarter.

Since the consumer price index is primarily used by the Australian central bank to measure inflation, any significant change in the CPI often makes the Forex market extremely volatile. Also, as the inflation at the retail level has a big influence on the central bank’s future monetary policy. Hence, it is considered by Australian binary options brokers to be a leading indicator of the Australian economy.

Last quarter, the Australian consumer price index increased by 0.5%, and the forecast for this quarter is that it will increase by 0.4%.

Japan – Household Spending

On Thursday, at GMT 11:30 p.m., the Japanese Statistics Bureau will release the year over year Household Spending figure, which measures the inflation adjusted value of all expenses by the Japanese consumers.

Binary options investors consider the household consumer spending to be a leading indicator of a country’s economic health. This is because the amounts spent by consumers have a ripple effect on the overall economic activity in the country.

Last month, the year over year Japanese Household Spending figure decreased by -0.1% and the forecast for this month is currently set at an increase of 0.6%.

AUD/JPY Forecast

AUD/JPY forecast for Australian binary options brokers

Since breaking above the long-term downtrend line on June 15, 2017, the AUD/JPY has climbed up by around 560 pips over the last two months and formed a well-respected uptrend line in the process. Last week, the AUD/JPY found a strong resistance near the 89.30 level and started a retracement that pushed the price near the uptrend line. Currently, it is trading near the support around 87.50 level.

As the Australian consume price index is set to increase lower than previous month, but the Japanese household spending forecast is set at a 0.6% increase, we believe it would likely set a bearish fundamental outlook for the AUD/JPY this week. Under the circumstances, if the AUD/JPY breaks below the support around 87.50, it would likely attract additional bearish momentum in the market.

Hence, Australian binary options traders should look out for trading opportunities below this major support level around 87.50.

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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 on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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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 on various tech and financial topics. You can reach him at contact@asifimtiaz.com

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