The AUD/JPY price moved sideways on Friday after the Reserve Bank of Australia (RBA) published the minutes of this week’s meeting. Then, it formed a hammer pattern and rose to a high of 93.85, which was higher than this week’s low of 90.57. So, what next for the AUD to JPY exchange rate?
RBA minutes
The AUD/JPY price tilted slightly after the RBA delivered this week’s meeting minutes. In it, the bank decided to hike interest rates by 0.50% in its bid to fight the red hot inflation. The bank said that it expects that prices will remain high until 2024. It expects inflation to rise to 7.75% by the end of the year and then end 2023 at about 4%.
Still, there are signs that the RBA is again wrong on inflation since the prices of many crucial items have started falling. For example, crude oil prices have dropped to about $90. Oil was trading at over $136 during its peak this year. This is notable since oil is an important part of inflation.
At the same time, the RBA expects the unemployment rate to remain under 4% in 2024, while wages will likely grow slower. The EUR/JPY price rose slightly after the latest data from Japan. The country said that household spending rose by 3.5% in June while overtime pay rose to 5.80%.
AUD/JPY forecast
The four-hour chart shows that the AUD/JPY price has been under pressure in the past few days. However, a closer look reveals that it has formed what looks like a triple-top pattern at 95.90. In price action analysis, this pattern is usually a bearish sign. In addition, it has also formed what looks like a head and shoulders pattern and moved below the 25-day and 50-day moving averages.
Therefore, the pair will likely have a bearish breakout in the coming days and move below the support at 90. However, a move above the resistance at 94 will cancel the bearish view.
