AUD/JPY – RBA To Stand Pat On Policy Decision

#OPINIONLEADER# #Signal#

 NOV 1, 2021

• RBA expected to keep monetary policy unchanged
• Attention shifted to RBA’s unscheduled purchase of A$1 billion government bonds
• AUD/JPY waiting for a clear trading direction

Chart 1: AUD/JPY H4 chart

The Reserve Bank of Australia (RBA) will be announcing their monetary policy decision tomorrow. With the most recent decision to keep quantitative easing (QE) unchanged at the current pace of A$4 billion per week until at least February 2022, the central bank is expected to make no changes to its monetary policy during the meeting. Nonetheless, pay attention to the rate statement on whether there will be any mentioning on the RBA’s most recent purchase of A$1 billion government bond maturing in April 2024.

AUD/JPY has been trading within a 110pips range for the past week. Our Bollinger Bands are also indicating the Bollinger Squeeze phenomena as a result of the recent consolidation. If the RBA relates its recent government bond purchase to its yield curve control, we may be seeing AUD/JPY breaking out of its current consolidation, presenting trading opportunities.

Trade Setup for AUD/JPY (H4)

Buy Stop at 86.30

Sell Stop at 84.70

Upcoming news that may impact price movement of AUD/JPY

02 November – Reserve Bank of Australia monetary policy decision at 1130 (GMT+8)

02 November – Reserve Bank of Australia Deputy Governor Debelle speaking at 1350 (GMT+8)

05 November – Reserve Bank of Australia monetary policy statement release at 0830 (GMT+8)

11 November – Australian employment data release at 0830 (GMT+8)