AUD/JPY clocks one-month high, eyes RBA decision

AUD/JPY extended the May Day gains to a fresh one-month high of 84.32 ahead of the China Caixin Manufacturing PMI release and the Reserve Bank of Australia (RBA) rate decision.

Markets ignore hawkish BOJ minutes

The BOJ March meeting minutes talked about the need to consider rate hikes and trim JGB purchases to the extent possible. The slightly hawkish tone of the minutes failed to impress the Japanese Yen, which remains on the back foot this Tuesday morning.

RBA to keep rates unchanged

The central bank has held the interest rate at record low of 1.5% since inflation and is likely to do so today as well. Keep in mind that the recent weakness in inflation data and labor market, coupled with the sharp drop in the key exports like iron ore and housing market concerns could force the policymakers to adopt a dovish tone. That could hurt the Aussie.

AUD/JPY Technical Levels

The cross was last seen trading around 84.32 levels. The descending trend line coming from Feb 16 high and Mar 2 high is seen offering resistance at 84.53, which, if breached would expose 84.78 (50-DMA) and 85.31 (100-DMA) levels.

On the downside, a breach of 84.08 (session low) could yield a pullback to 83.60 (5-DMA). A violation there could see the pair extend losses to 83.09 (10-DMA).