#AUDJPY @ 89.7850 marks 70-pip rebound from multi-day low on BoJ, picking up bids of late. (Pivot Orderbook analysis)

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• AUD/JPY marks 70-pip rebound from multi-day low on BoJ, picking up bids of late.
• BoJ defends current monetary policy status even as the dovish Governor departs after a decade.
• Governor Kuroda’s speech, risk catalysts eyed for fresh impulse.

The pair currently trades last at 89.7850.

The previous day high was 90.67 while the previous day low was 89.55. The daily 38.2% Fib levels comes at 89.98, expected to provide resistance. Similarly, the daily 61.8% fib level is at 90.24, expected to provide resistance.

AUD/JPY portrays a rollercoaster move as the Bank of Japan (BoJ) refrains from any major surprises even as Governor Haruhiko Kuroda braces for a goodbye during early Friday. That said, the cross-currency pair initially dropped to 89.26 and refreshed the seven-week low before rallying to the 90.00 threshold, around 89.90 by the press time.

BoJ keeps the short-term interest rate target at -0.1% while directing 10-year Japanese Government Bond (JGB) yields within the band of +/-0.50%. The BoJ Statement, however, mentioned that inflationary expectations are rising, which in turn raises doubts about the future of the Japanese central bank’s ultra-easy monetary policy.

Also read: BoJ: Inflation expectations heightening

Apart from the BoJ moves, a news piece from Bloomberg suggesting that China’s consumer spending is showing signs of a strong rebound joins the hopes of more stimulus from the dragon nation and the US readiness for more spending seems to also favor the AUD/JPY buyers.

Amid these plays, S&P 500 Futures dropped to a fresh low since January 10, down half a percent near 3,900, whereas the US 10-year and two-year Treasury bond yields fall for the second consecutive day to 3.83% and 4.76% in that order.

Elsewhere, the geopolitical fears surrounding China and the US, mainly due to Taiwan, as well as fears emanating from Russia, exert downside pressure on the AUD/JPY prices.

It should, however, be noted that the dovish rhetoric from Reserve Bank of Australia (RBA) Governor Philip Lowe, compared with likely challenges to the BoJ’s ultra-easy monetary policy and the market’s bets of an interest rate hike during late 2023, seems to also cap the AUD/JPY prices ahead of a volatile day.

Failure to provide a decisive break of an upward-sloping support line from late January 2022, around 89.50 by the press time, keeps AUD/JPY buyers hopeful of poking the previous support line from early January 2023, close to 90.40 at the latest.

Technical Levels: Supports and Resistances

AUDJPY currently trading at 89.91 at the time of writing. Pair opened at 89.67 and is trading with a change of 0.27 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 91.76, 50 SMA 91.14, 100 SMA @ 91.95 and 200 SMA @ 93.1.

The previous day high was 90.67 while the previous day low was 89.55. The daily 38.2% Fib levels comes at 89.98, expected to provide resistance. Similarly, the daily 61.8% fib level is at 90.24, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 89.25, 88.84, 88.13
• Pivot resistance is noted at 90.38, 91.08, 91.5

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