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AUD/JPY Rebounds From Key Support Ahead of RBA Policy Meeting

AUD/JPY Rebounds From Key Support Ahead of RBA Policy Meeting

David Song, Strategist

AUD/JPY may stage a larger recovery ahead of the Reserve Bank of Australia’s (RBA) next policy meeting on October 4 as the pair rebounds from a key support zone, while Governor Philip Lowe and Co. are widely anticipated to keep the benchmark interest rate at the record-low of 1.50%.

AUD/JPY Daily

AUD/JPY Daily Chart

The low-yielding environment may continue to benefit the Australia dollar as the RBA looks poised to retain a wait-and-see approach throughout the remainder of the year, and AUD/JPY may continue to retrace the decline from the summer months as it breaks out of the near-term range and continues to find support around 75.80 (23.6% retracement) to 76.10 (38.2% expansion). With that said, a closing price above 77.90 (38.2% retracement) may spur a run at the September high (79.12), but the 100-Day SMA (77.92) may continue to act as a key hurdle as the moving average kept the pair capped throughout the summer months.

In turn, the bearish trend from back in 2014 may reassert itself over the near to medium-term should AUD/JPY ultimately stage a failed run at the September high (79.12).

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--- Written by David Song, Currency Analyst

To contact David, e-mail dsong@dailyfx.com. Follow me on Twitter at @DavidJSong.

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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