Chinese GDP Could Spark A Reversal in Aussie

Technical Bias: Bearish

Key Takeaways

• Most majors are sitting in ranges as the Forex market prepares for action.
• Chinese Gross Domestic Product (GDP) measuring the annualized change in the inflation-adjusted value of all goods and services is set to rock market during the next Asian session.
• Aussie dollar might climb and take advantage of the Japanese yen weakness moving ahead.

Earlier, the Governor of the Bank of Japan Haruhiko Kuroda stated that the central bank would keep up with monetary easing until inflation is firmly anchored. His remarks increased bearish pressure on the Japanese yen especially against the Aussie dollar.

Technical Analysis

AUDJPY benefited from the Japanese news as it climbed higher above the 94.00 level. There is no denial that the pair is positively biased in the near term, but a lot would depend on the upcoming Chinese GDP release. If the outcome surpasses market’s expectation, then the Aussie dollar might surge against a basket of currencies including the Japanese yen. There are several hurdles on the way up for the pair, starting with the 100 simple moving average which is sitting around the 50% Fibonacci retracement level of the last drop from the 97.91 high to 91.75 low. If AUDJPY buyers manage to surpass the mentioned resistance area, then it might head towards another critical zone at 95.50. There is a monster trend line around the stated area which is also meeting the 61.8% fib level. So, AUDJPY buyers could struggle around 95.10-95.50 if the pair climbs higher.

On the downside, there is only open space. So, if the Chinese GDP fails to impress investors, then we might witness pressure selling in AUDJPY. In that situation, the pair might fall towards the 92.00 support area.

Chinese GDP

There is an important economic release lined up during the next Asian session i.e. the Gross Domestic Product (GDP) will be published by the National Bureau of Statistics of China. The forecast is of a minor decline from the previous rate of 7.5% in Q3 (YoY). Let us see how the outcome shapes out and affects the price action moving ahead.