FxWirePro: AUD/JPY plunges below daily cloud, RBA 50 bps rate hike fails to impress

Chart - Courtesy Trading View 

AUD/JPY was trading 1.71% lower on the day at 90.80 at around 05:35 GMT.

The Australian dollar was sold off across the board after the Reserve Bank of Australia (RBA) rate hike announcement.

The RBA has raised its Official Cash Rate (OCR) by 50 basis points (bps) to 1.85% in line with the market expectations.

Indecision over the RBA’s next move amid rising price pressures, as well as the risk-off mood weigh on the pair.

Data released by the Australian Bureau of Statistics last week showed Q2 inflation rate stood at 6.1%, higher by 100 bps than the previous quarter’s print.

Recession fears, headlines concerning China join chatters surrounding Japan’s wage hike and yields to keep downside pressure in the pair.

AUD/JPY has plunged below daily cloud and technical bias remains strongly bearish. Scope for further weakness.

Support levels - 89.62 (38.2% Fib), 87.65 (200-DMA)

Resistance levels - 92.09 (Cloud base), 92.39 (23.6% Fib)

Summary: AUD/JPY poised for further downside. Scope for test of 38.2% Fib retracement at 89.62.