AUD/JPY Likely to Find Bullish Momentum If the Japanese Unemployment Rate Picks Up

Last Updated on October 27, 2020

AUD/JPY Weekly Outlook: 28th October 2020

Australia – Consumer Price Index

On Wednesday, at GMT 12:30 a.m., the Australian Bureau of Statistics will release the quarter-over-quarter consumer price index (CPI) figure. It measures the changes in the price of goods and services bought by Australian consumers in the last quarter.

The consumer price index is primarily used by the Australian central bank to measure inflation. Any significant change in the CPI often makes the Forex market extremely volatile. Also, inflation at the retail level has a big influence on the central bank’s future monetary policy. Hence, it is considered by Australian brokers to be a leading indicator of the Australian economy.

Last quarter, the Australian consumer price index decreased by -1.9%. The forecast for this quarter is that it will likely increase by 1.5%.

Japan – Unemployment Rate

On Thursday, at GMT 11:30 p.m., the Japanese Statistics Bureau will release the national unemployment rate. It measures the percentage of the total workforce which remained unemployed over the past month.

CFD traders consider the unemployment rate to be one of the most important fundamental indicators of the Japanese economy. It is because one of the main goals of the Bank of Japan is to keep unemployment as low as possible. Although this is a lagging indicator, analyzing this data can help Forex trading investors predict future interest rates and inflation situation in the country.

Last month, the unemployment rate in Japan came out at 3.0%. This month, analysts are expecting it to come out slightly higher, at 3.1%.

AUD/JPY Forecast

AUD/JPY Chart - 28th October 2020

On September 8, 2020, the AUD/JPY broke below the uptrend line. However, by the end of the month, it found support near the 74.00 level. Over the last few weeks, it started a bullish retracement and broke above the intermediate downtrend line, but soon declined towards the support near 74.00. Yesterday, it once again tested the previous downtrend line. But, so far, it has failed to penetrate above the resistance near 74.95.

The Australian Consumer Price Index will likely increase by 1.5% over the last month. On the other hand, analysts are expecting the Japanese unemployment rate to increase by 0.1% to 3.1%. We believe it would set a bullish fundamental outlook for the AUD/JPY this week. Therefore, if the AUD/JPY closes above the resistance near 74.95, it would likely attract additional bullish momentum in the market.

Hence, CFD traders should look out for trading opportunities above this major resistance level around 74.95.

Market Analyst / Trading Consultant at Asif Imtiaz
Market Analyst / Trading Consultant . Asif worked as a prop trader for almost a decade, and later he managed trading operations for one of the largest foreign exchange strategy developers in Europe. Currently, he works as a trading consultant to several brokers and writes about various tech and financial topics. You can reach him at [email protected]
Asif Imtiaz

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