AUD/JPY near one-month high ahead of RBA

AUD/JPY cross rose to 78.44, the highest level since September 8 amid strong Aussie data and broad based JPY selling ahead of the RBA rate decision.

RBA seen on hold

The central bank is seen keeping rates unchanged, although investors will be scanning the policy statement to see if the bank sees Aussie strength as a threat to economic recovery and whether the interest rate cut initiated twice this year is having intended effects.

The currency pair is on the front foot heading into the data release. Sharp rise in the annualized building approvals reported by Australia today failed to have a significant impact on the pair.  

AUD/JPY Technical Levels

At the time of writing, the spot was trading around 78.35. A break above 78.67 (Aug 8 high) could yield a move to major resistance at 79.13 (Sep 6 high). A violation there could see the cross test supply around 80.00 levels (zero figure). On the other hand, a move back above 77.88 (100-DMA) would open doors for a drop to 77.34 (50-DMA) and 77.00 (zero figure) levels.