The Reserve Bank of Australia (RBA) is the only major central bank (outside of Japan) that hasn’t lowered interest rates recently. If the RBA does start to lower rates, the Australian dollar could fall significantly. This week, Australia’s July-September Consumer Price Index (CPI) is expected to drop from 3.8% to 2.9%. If this forecast is correct, it may raise expectations of an interest rate cut by the year’s end, which could lead to more selling of the Australian dollar.
The AUD/JPY pair has been moving around the 200-day moving average near 100 yen, but if it breaks below this range, selling pressure could increase quickly. Additionally, depending on the outcome of Japan’s House of Representatives election, if Japanese stock prices fall, investors may avoid risk by buying the yen, which could further push down AUD/JPY.
This week’s forecast range for AUD/JPY: 101.20 – 98.60 yen
Note: The above content does not guarantee profits. Please make your own trading decisions.