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Is AUD/JPY Ready for a Breakout?
Over the past week, Aussie has been the one currency that has stood its ground against the buck. There is are several good reasons for this. Much to the surprise of the market the Australian economy is not collapsing despite the slowdown of growth in China. In fact the latest jobs data from Down Under showed a massive increase.
All of this has led the RBA to remain decidedly neutral and the central bank is not likely to lower rates this year or for the foreseeable near term horizon. That fact should help to preserve the Aussie yield especially against the yen which continues to weaken as the market becomes more and more convinced that the Fed will normalize rates in December.
Technically with the pair making higher lows and price curled around the key 85.50 level the pair looks to be on the cusp of breakout which can propel it to eventually close the three month old gap around the 90.00 figure.