AUD/JPY ignored RBA’s warning on strong currency

AUD/JPY cross turned a blind eye towards minutes of Reserve Bank of Australia June meeting, which warned about the negative impact of a strong AUD on Australia’s trade.

Trades above hourly 100-MA

The currency pair hardly moved after the minutes release and continues to trade above the hourly 100-MA level of 77.55. RBA minutes released just now said, “Appreciation of AUD could complicate adjustment of economy to the lower terms of trade.” Minutes also cautioned that Q2 growth could be more moderate and employment growth appears to have lost momentum.

However, at the moment the cross is being guided by demand for Yen ahead of Brexit referendum. The pair is looking to extend gains above hourly 100-MA as USD/JPY is approaching 104.00 levels. Falling Brexit bets are capping demand for the safe haven Yen.

AUD/JPY Technical Levels

The immediate resistance is noted at 78.16 (hourly 200-MA) – 78.22 (10-DMA), which if breached would open up resistance at 78.74 (June 15 high), Acceptance above the same could strengthen the bid tone further and expose psychological level of 80.00.

On the other hand, a break below 77.48 (5-DMA) would open doors for a drop to 76.71 (June 17 low), which if taken out would expose 75.59 (June 16 low).