On Tuesday, the AUD significantly fell against the Yen after the publication of weak trade balance data from China as imports in September fell by 17.7%, against expected fall of 15%. This big reduction in imports to China means a large fall in commodities exports for the Australian economy.
The Yen, on the other hand, found support in the latest publication of the Bank of Japan Minutes. Despite forecasted deflation in the country, the regulator considers that a temporary situation and does not see a need of additional stimulus measures for the economy.
Support and resistance
Bollinger Bands on the daily chart is growing, while the price range remains wide. The indicator formed a sell signal as the price has left the upper border of the range. MACD turned down and formed a sell signal. Stochastic is falling.
The indicators recommend short positions.
Support levels: 86.00 (local low). 85.69, 85.00, 84.46, 83.62, 83.00 (24 and 29 September lows), 82.10 (минимум 4 September low).
Resistance levels: 86.45 (local high), 87.00, 87.30, 88.00, 88.60 (12 October high).
Long positions can be opened after the breakout of the level of 86.80 with the target at 87.70 and stop-loss at 86.60. Validity – 1-2 days.
Short positions can be opened after the breakdown of the level of 86.30 with targets at 85.80, 85.15 and stop-loss at 86.50. Validity – 2-3 days.