AUD/JPY: major reversal of 2016 downtrend and BoJ

By FXStreet FXStreet (Guatemala) – Today for the cross, it is all about the BoJ.

The market is fully anticipating a change from the Central Bank to their policy or the JPY80trn pace of asset purchases, however one cannot rule out a surprise at this stage following the mixed signals of late and given the state of the Japanese economy, Yen strength, the value of oil and a worsening inflation outlook, as such much needed adjustments could be voted for.

Meanwhile, the cross has been supported on a better outlook in Australia after the surprises to the upside in the CPI in a stark contrast to competing nations. The cross rallied from support of the 200 sma on the 1hr charts at the mid point of the 81 handle and has been a steady climb to recent highs of 84.80.

AUD/JPY levels

Technically, the 20 sma on the 1hr stick offers potential support at 83.80 while a correction below the 83 handle would need to break 27th Jan lows of 83.00 and S1 that is guarding S2 at 82.84 (20 dma) and S1 at 82.64.

On a continuation of the uptrend, 85.40 comes into play as a target with the price …read more

Source:: FX Street