AUD/JPY Tests Key Support Near 77.00 Amid Forecast of Rising Household Spending in Japan

AUD/JPY  Forecast & Technical Analysis for Australian binary options

Japan – Household Spending

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

Australian Binary options investors consider 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 -10.2%. The forecast for this month is that it will likely increase by 2.5%.

Australia – House Price Index

On Tuesday, at GMT 12:30 a.m., the Australian Bureau of Statistics will release the House Price Index (HPI), which measures the changes in the selling price of houses in the 8 state capitals in Australia.

Rising house prices indicate that investors are confident about purchasing houses and vice-versa. Hence, binary options traders consider the HPI to be a leading indicator of investor confidence in the country. The HPI is usually released every three months in a quarter-over-quarter format.

Last month, the Australian HPI suggested that house prices in Australia’s 8 state capitals have decreased by -1.8%. The forecast for this month is set at an additional decrease of -0.4%.

AUD/JPY Forecast

Chart of AUD/JPY - 7th December 2020

The AUD/JPY broke above the downtrend line on November 5, 2020. Since then, it has climbed up by around 210 pips. Last week, it broke above the resistance near 77.00. However, soon it turned range bound. Earlier today, the AUD/JPY penetrated below the 77.00 level and currently, it is trading just above this major pivot zone.

The Australian House Price Index will likely decrease once again by -0.4%. By contrast, the forecast for Japanese household spending is that it will likely increase by 2.5%. 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 77.77, 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 77.00.

 

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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