Daily Outlook

AUD/USD settled in a tight range just above 0.7500 as the market settled down post CPI and FOMC. With the RBA on Tuesday the market will by unlikely to rally sharply ahead of a potential interest rate cut. The USD is on the backfoot post FOMC though so that is supporting the AUD/USD on dips and now the market is looking to the Bank of Japan for the next inspiration.

The Bank of Japan meeting is likely to conclude by 3pm today Australian time and expectations are high for a rate cut and/or expansion of the Asset purchase program. The USD/JPY is extremely volatile in the last 24 hours with rumors of government pressure on the BOJ spooking the market this morning. USD/JPY was as high at Y107.50 last week and touched Y103.30 this morning.

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USD/JPY Intraday: the downside prevails. Pivot: 105.50 Our preference: short positions below 105.50 with targets @ 103.95 & 103.30 in extension. Alternative scenario: above 105.50 look for further upside with 105.90 & 106.50 as targets. Comment: the RSI shows downside momentum. Supports and resistances: 106.50 *** 105.90 *** 105.50 *** 104.49 Last 103.95 *** 103.30 *** 102.85 **

Ticker : JPY

AUD/USD Intraday: continuation of the rebound. Pivot: 0.7490 Our preference: long positions above 0.7490 with targets @ 0.7535 & 0.7550 in extension. Alternative scenario: below 0.7490 look for further downside with 0.7455 & 0.7435 as targets. Comment: the RSI calls for a new upleg. Supports and resistances: 0.7565 ** 0.7550 *** 0.7535 *** 0.7521 Last 0.7490 *** 0.7455 *** 0.7435 ***

Ticker : AUD