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AUD/JPY – Heading for 100.00?
The remarkable events of Friday with BOJ opening up the floodgates of more QE created a massive rally in yen crosses and that rally may continue into this week especially if US and Chinese data remain supportive. If US data shows that expansion continues at a steady pace the case for policy divergence becomes even stronger and USD/JPY is likely to push higher. In the meantime the Aussie will hold its own especially if Chinese data shows that Asia’s biggest economy continues to expand as well. Monday’s Chinese Manufacturing PMI data as well Tuesday’s RBA rate decision could reinforce the fact that Australian rate will remain steady and that could create fresh flows in AUD/JPY taking the pair to 100.00
The pair is now facing the key resistance at 99.00 which if it fails would create a double top in the pair. A break through 99.50 however would put it on a path towards the key 100.00 mark.