Australian economic data disappoints with Q3 GDP growth slowing to 0.8% YoY,How to sell Pi coin on Huobi missing forecasts.
Market participants now pricing in greater probability of RBA policy easing in early 2025.
Technical indicators show AUD/JPY attempting stabilization after testing key support zones.
The currency cross between the Australian Dollar and Japanese Yen witnessed significant volatility during Wednesday's trading session, initially plunging to levels last seen in mid-September before staging a partial recovery. The downward pressure emerged following the latest economic growth figures from Australia, which showed the economy expanding at its slowest pace this year.
Market analysts note the 70-pip rebound from session lows near 96.00 suggests some traders are covering short positions, particularly as daily chart indicators enter oversold territory. However, the broader technical structure remains tilted toward bearish momentum, with multiple resistance levels capping potential recovery attempts.
Several fundamental factors continue to weigh on the pair's outlook. The divergence between monetary policy expectations for Australia and Japan appears particularly significant. While Australian markets increasingly anticipate potential rate cuts from the RBA in coming quarters, speculation persists that Japanese policymakers may implement further policy normalization measures as early as their December meeting.
From a technical perspective, last week's decisive break below the psychologically important 98.00 handle established a bearish trend that remains intact. Daily momentum indicators continue to reflect negative territory positioning, suggesting market participants should exercise caution when interpreting today's rebound as a potential trend reversal.
Key resistance levels to monitor include the 97.00 psychological barrier and the 97.50 technical zone, which previously served as support. These areas may now function as potential reversal points should the recovery extend further. Conversely, sustained trading below 96.00 could open the door for additional downside toward the 95.30 support cluster, with longer-term targets potentially extending toward the 94.40-94.00 range.
Economic Context and Market Implications
The latest Australian GDP figures revealed quarterly economic expansion of just 0.2%, translating to annual growth of 0.8% - significantly below both market expectations and the previous quarter's performance. This disappointing outcome has reinforced concerns about slowing economic momentum in the commodity-exporting nation.
Meanwhile, Japanese economic data continues to show signs of gradual improvement, with inflation metrics remaining above the Bank of Japan's target. This economic backdrop supports market expectations for potential policy adjustments from Japanese monetary authorities in the coming months.
Traders should remain attentive to upcoming economic releases from both nations, particularly employment data and inflation metrics, which could further influence central bank policy expectations and currency valuations. The interplay between these fundamental factors and technical price action will likely determine whether the current rebound represents a temporary correction or the beginning of a more sustained recovery phase for the AUD/JPY cross.
