The AUDJPY currency pair etched its way into the woodwork as a hoist of currencies gained on the backdrop of slowing inflation in the US and a dovish Federal Reserve as a result. Traders may turn their attention towards the Meeting Minutes tomorrow for an indication of whether the Reserve Bank of Australia is going to hike interest rates further and thereby boost the Australian Dollar.  

However, inflation in Japan is expected to rise, which may encourage the Bank of Japan to tweak its interest rate policy, thereby boosting the Japanese Yen against the AUD. Will the RBA encourage a shift, or will the BOJ alter its policies after remaining steadfast for over a decade? 

Technical 

The Heikin Ashi candles edged higher on the 4H Chart, establishing resistance at 95.175. However, a slight pullback at the beginning of the week saw the upward trend reverse. If downside momentum persists, the 93.519 major support may pose a barrier to further downside possibilities. 

However, the slight pullback towards the 94.301 support at the 23.60% Fibonacci Retracement may propel the price toward the 94.784 level at the 38.20% Fibonacci Retracement as demand slightly outweighs supply. A breakthrough from the 38.20% Fibonacci Retracement may edge the currency pair towards the 95.175 resistance, which could act as a pivot point towards the 96.830 major resistance. 

Summary 

The AUDJPY currency pair rose due to slowing US inflation; however, a recent pullback may encourage the price action towards the 93.510 major support. If the current price level holds, the currency pair may be encouraged to retest the 96.830 major support on the backdrop of an unwavering RBA and a sticky Bank of Japan. 

Sources: TradingView, Reuters