FX.co ★ Fundamental Analysis of AUD/JPY for February 14, 2019

AUD/JPY is currently quite impulsive with the recent bullish pressure after bouncing off the 78.50 area with a daily close. AUD is backed by positive economic reports despite the pressure from the US-China trade talks. AUD strength is expected to lead to further bullish pressure in the coming days.

Recently, the US-China trade tensions have fueled an economic slowdown in Australia which is mirrored in the weakest GDP data in last 10 years. Nevertheless, AUD found support from upbeat export data amid China's official trade balance figures. Today MI Inflation Expectation also increased to 3.7% from the previous value of 3.5%. Moreover, recently Westpac Consumer Sentiment showed significant growth to 4.3% from the previous value of -4.7%. Tomorrow RBA Governor Kent is going to speak about the key interest rate decisions which is expected to unchanged and monetary policy which may have certain affects from the global trade tensions. In case the US and China eventually settle up a trade deal, it is expected to lead to further bullish pressure in the pair, enabling AUD to gain momentum against JPY.

On the JPY side, Bank of Japan's Governor Kuroda recently stated that it was his responsibility to achieve the BOJ's 2% inflation target by pursuing its stimulus policy and he would make sure to achieve it in the medium term. Kuroda is currently assessing the central bank's stimulus policy so that it would not cause side effects. Today Japan's Prelim GDP report was published with an increase to 0.3% from the previous value of -0.6% which failed to meet the expected value of 0.4% and Prelim GDP Price Index was published unchanged at -0.3% which was expected to decrease to -0.4%.

Meanwhile, JPY has been flat amid the recently published economic reports whereas AUD is firmer at present. Until optimism about the US-China trade talks boosts AUD growth in the coming days, AUD is expected to dominate JPY for a while.

Now let us look at the technical view. The price is currently trading above 78.50 area with a retest as well. The bullish pressure is going to push the price higher towards 80.00 and later towards 82.50 resistance area in the coming days. As the price remains above 78.50 area with a daily close, the bullish pressure is expected to continue pushing higher in the coming days.

SUPPORT: 75.50, 77.50, 78.50

RESISTANCE: 80.00, 82.50

BIAS: BULLISH

MOMENTUM: NON-VOLATILE