Aussie drops notably after even though RBA abandoned yield curve control, and signaled that interest rate could be raised earlier than previously expected. Yet, it’s clear that RBA would hold their hands, probably after well into 2023, before making a decision, if inflation is not out of control. That is, it will still lag behind some other major central banks in stimulus removal.
AUD/JPY is now extending the consolidation pattern from 86.24 short term top with another falling leg. 84.59 support would provide the first defense. As long as this level holds, the consolidation should be relatively brief, and we’d expect a break of 86.24 high to come sooner rather than later. In that case, the medium term up trend would continue to 61.8% projection of 59.85 to 85.78 from 77.88 at 93.90 next.
However, break of 84.59 will bring deeper correction to 38.2% retracement of 78.82 to 86.24 at 83.40 first, or even to 55 day EMA (now at 82.80), before up trend resumption.
