AUD/JPY trims gains as RBA maintains neutral stance

AUD/JPY backed off from the session high of 86.83 levels after the Reserve Bank of Australia (RBA) kept rates unchanged at 1.5% and maintained the neutral stance.

Trades around hourly 200-MA

The cross was last seen trading around the hourly 200-MA level of 86.62 levels. The Aussie dollar was on the rise ahead of the policy decision possibly in hopes that the RBA may sound a little hawkish in response to the upbeat Q4 GDP readings and strong trade balances.

However, the RBA kept its neutral stance intact, which triggered an unwinding of AUD longs. Moreover, losses in the iron ore prices could weigh over the AUD during the day ahead. JPY side of the story could come into play as well if the equity markets maintain Monday’s risk-off tone.

AUD/JPY Technical Levels

A break above 86.66 (5-DMA) would open doors for 87.08 (Feb 24 high) and 87.39 (Feb 22 high). On the downside, support is seen at 86.16 (previous day’s low), which, if breached could yield 85.85 (Feb 28 low), under which losses could be extended to 85.24 (Feb 7 low).