AUD/JPY takes a U-turn, drops towards 84.50 on RBA

The recovery in AUD/JPY lost legs near 84.30 region, sending the rate back below 84 handle, as sell-off intensifies following the announcement of RBA’s monetary policy. The RBA left its cash rate unchanged at a record low of 1.50% today, maintaining the neutral stance on interest rates outlook.

The Aussie fell sharply after the RBA expressed concerns over rising house prices, while adding that a higher AUD would complicate the economy's transition away from mining.

Moreover, extension of losses in the Asian equities further fuelled risk-off trades, boosting the safe-haven flows for the yen, and hence, weighing heavily on the cross.

With the Aus trade data and RBA out of the way, focus now remains on the upcoming US macro data and risk trends for fresh incentives on the prices.

Technical Levels

Higher side: 84.75/79 (10 & 5-DMA), 85.54/61 (Fib R3/ 20-DMA), 85.91/86 (100-DMA/ round number)

Lower side: 83.50 (psychological levels), 83.00 (zero figure), 82.63 (200-DMA)