FxWirePro: AUD/JPY extends gains as hotter-than-expected Australian Q3 CPI fans aggressive RBA rate hike bets

Chart - Courtesy Trading View 

Spot Analysis:

AUD/JPY was trading 0.32% higher on the day at 94.85 at around 05:15 GMT

Previous Week's High/ Low: 95.73/ 92.08

Previous Session's High/ Low: 94.66/ 93.86

Fundamental Overview:

Data released by the Australian Bureau of Statistics (ABS) earlier on Wednesday showed Australian Q3 inflation rose more than expected in to a 32-year high.

Australian Consumer Price Index rose 1.8% in Q3, higher than expectations for a rise of 1.6%, and remained steady from last quarter’s figure of 1.8%. 

On an annualized basis, CPI inflation rose 7.3%, more than expectations for growth of 7.3% and the previous quarter’s reading of 6.1%. 

The annual reading was Australia’s fastest growth in annual inflation since 1990. Data likely suggests that the Reserve Bank of Australia may have acted prematurely in toning down its pace of interest rate hikes this month.

The data is likely stoking chances of more aggressive interest rate hikes by the central bank to control rising price pressures.

Technical Analysis:

- AUD/JPY is extending break above 55-EMA

- Price action has entered into the daily cloud

- Momentum is bullish and volatility is high and rising

- GMMA indicator shows major trend is neutral while minor trend is turning bullish

Major Support and Resistance Levels:

Support - 94.37 (5-DMA), 94.07 (55-EMA), 93.36 (110-EMA)

Resistance - 95.31 (Upper BB), 96, 96.61 (Upper W BB)

Summary: AUD/JPY poised for further upside. Scope for test of fresh yearly highs above 98.59.