- Summary:
- The AUDJPY pair was mixed on the day after the Reserve Bank of Australia kept the key interest rate at 0.25 but extended bank funding.
The AUDJPY was mixed on the day after the Reserve Bank of Australia kept the key interest rate at 0.25. The move was very much expected after Governor Philip Lowe had said that the 0.25 bound was the lowest the bank could go.
A surprise announcement came in the form of an extension and expansion to the RBA’s Term Funding to Australian banks. The program was expected to be wound up in September but has since been extended to June 2021. Under the facility, banks will have access to additional funding at 2% of their outstanding credit at a fixed rate of 0.25 for three years. AUD$52bn has already been drawn from the Term Funding Facility and the announcement will make up to AUD$200bn available.
The AUDJPY was higher last week on the announcement that Japanese Prime Minister Shinzo Abe was resigning on health issues, with his successor to be chosen on September 17th.
Tomorrow should give the pair a clearer direction with the release of second quarter Australian GDP data. The market is expecting a drop of -5.3% year-on-year after the country saw growth of 1.4% in the first quarter.
AUDJPY Technical Outlook
The AUDJPY is slightly higher on the day at 78.14 after a strong rally through resistance last week. The price may want to retest that level for support but the path of least resistance is still up. Traders should keep an eye on the GDP tomorrow for the next move. A close below the 76.82 level could lead to further losses and I posted the larger price targets for a bullish and bearish outlook in my article on Friday covering the weekly chart. Investing Cube writers, including myself, are available for one-to-one coaching on the markets. See the link here for details.
AUDJPY Daily Chart
