AUD/JPY Bears to Test Uptrend Line Amid Severe Fall in Australian Business Confidence

AUD/JPY  Forecast & Technical Analysis for binary options

Australia – National Australia Bank (NAB) Business Confidence Index

On Tuesday, at GMT 1:30 a.m., the National Australia Bank (NAB) Limited will release its monthly business confidence index figure. It measures the level of a diffusion index based on a survey of 350 businesses in Australia.

The survey asks respondents to rate the current business environment in Australia. Businesses are the first to react to changing business conditions. So, HighLow.net binary options traders consider it as a leading indicator of the overall economic health in the coming months. It is because the level of their sentiment can signal optimism and business confidence in the economy.

Last month, the NAB business confidence index reading came out at -2. This month, amid global slowdown due to COVID-19 situation, it fell to -66.

Japan – Tertiary Industry Activity

On Friday, at GMT 4:30 a.m., the Japanese Ministry of Economy, Trade and Industry will release the month over month tertiary industry activity data. It measures the changes in the total value of services bought by tertiary businesses in Japan.

The Japanese businesses increase their purchases of various services in order to expand their business when they feel optimistic. Hence, binary options investors consider the tertiary industry activity to be a leading indicator of the overall Japanese economy.

Last month, the Japanese tertiary industry activity went up by 0.8%. This month, the forecast is currently set at a decline of -0.2%.

AUD/JPY Forecast

AUD/JPY Forecast - Monthly Chart - April 16 2020

Since March 19, the AUD/JPY has gone up by more than 950 pips. At the end of March, it broke above the daily downtrend line. Over the last week, it broke above the major resistance near the 67.50 level as well. However, earlier today, it found resistance near the 69.40 level. But, before the bears can take control, the AUD/JPY has to break below the uptrend line and the resistance turned support level at 67.50 first.

The Australian NAB Business Confidence level fell to -66 last month. On the other hand, analysts are expecting the Japanese Tertiary Industry Activity to fall by only -0.2%.  We believe it would set a bearish fundamental outlook for the AUD/JPY this week. Therefore, if the AUD/JPY closes below the support near 67.50, 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 67.50.

John was born in Wollongong (NSW ) and studied at The London School of Economics ( England, UK ). Currently he lives in Sydney ( NSW ) and he works as financial market analyst.

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