The lucky country does it again: AUD/JPY
Tony Sycamore January 21, 2021 11:05 AM
A day to be sure when Australia has lived up to its reputation of the “lucky country” following a trifecta of good news.
Following a positive lead from offshore equity markets overnight, the ASX200 has built on yesterday’s break higher, trading to fresh 11 months highs, above 6800.
There is now little in the way of resistance until 6880/6900, an achievable upside target.
Following another day of zero community transmission in Australia, restrictions are set to ease across the states of NSW, QLD and SA. While no formal number of permissible COVID-19 new daily cases has been announced by any state Premiers, it’s becoming clear that outside of NSW that number is zero. In which case, the forthcoming easing in restriction should be enjoyed now in case they are only temporary.
Finally, this morning’s jobs report for December provided an encouraging set of numbers. Employment rose by +50k, bang in line with expectations but the unemployment rate eased lower to 6.6% from 6.8%, well below the RBA’s latest forecasts of 8%.
Also notable, the participation rate rose to a historical high of 66.2% and the underemployment rate that measures the degree of slack in the labour market (the shortfall between the volume of work desired by workers and the actual volume of work available) fell sharply, from 9.4% to 8.5%.
When combined with the favourable international backdrop including another round of stimulus in the US and a plan to enact a massive wave of infrastructure spending, overlayed with benign risk sentiment and strong commodity prices, the backdrop for AUD/JPY is favourable.
Technically, AUD/JPY appears to have completed a corrective retracement in January from the 80.93 high to the 79.50 low. The 79.50 low picked up nicely the uptrend support coming from the late October, 73.13 low.
Providing AUD/JPY remains above support at 79.50ish, we favour holding longs in expectation of a retest of the 80.93 high, before a rally towards 81.50.
Source Tradingview. The figures stated areas of the 21st of January 2021. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
GAIN Capital Singapore Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the GAIN Capital group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), GAIN Capital Singapore Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact GAIN Capital Singapore Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither GAIN Capital Singapore Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
GAIN Capital Singapore Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.