Nov 22, 2024 (MENAFN via COMTEX) --
(MENAFN - Daily Forex)
The Australian dollar initially did rally a bit during the trading session on Wednesday but found quite a bit of resistance above as we continue to see a lot of noisy behavior. With that being said, I think we've got a scenario where traders are going to continue to look at this as a potential buy on the dip type of market as we have seen the 99.50 yen level offer massive support. Now, we have the 50 day EMA as well as the 200 day EMA indicators coming into the picture to offer support.
This Market Could Remains Sideways For a While
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With this being said, I think you've got a situation where traders are going to continue to be somewhat sideways, but given enough time, I do think that eventually the interest rate differential will continue to be a major driver of what happens next. If that's the case, once we break the 102 yen level, the pair will likely move much higher. While Japan has started discussing tightening monetary policy, the reality is that they can't take significant action beyond the recent moves they've already made.
So, with that being said, I think if we do break above the 102 yen level, it will probably be more or less a FOMO trade. If we were to break down below the 99.50 yen level, then we could see a drop to the 98 level, but really at this point in time, I think the bulk of traders are still looking for this to go higher.
AUD/JPY is a pair that will continue to follow the overall attitude of the
Japanes Yen more than anything else, as the Bank of Japan continues to be a major factor in what happens with currency markets, specifically anything that is related to the JPY. Ultimately, the interest rate differential still makes this a very desirable investment, as recently the Reserve Bank of Australia has chosen to sit still with its monetary policy.
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