AUD/JPY Price Appears Trapped in an Inside Bar

Japan – Retail Sales

On Sunday, at GMT 11:50 p.m., the Japanese Ministry of Economy, Trade and Industry (METI) released the year-over-year retail sales data, which measures the changes in the total value of sales made by the retailers in Japan over the past month. This data is published in an annualized format.

Since the retail sales data acts as the main gauge of consumer spending in Japan and consumer spending accounts for a large portion of overall economic activity in the country, binary options traders consider this to be one of the most important fundamental indicators of the Japanese economy.

In November, the Japanese retail sales figure increased by 1.8% and the forecast for this month was set at a decrease of 0.1%. The actual figure came out as expected, at -0.1%.

Australia – Private Sector Credit

On Thursday, at GMT 12:30 a.m., the Reserve Bank of Australia will release the month-over-month Private Sector Credit data, which measures the changes in the total value of new credit issued to consumers and corporations in the country over the previous month.

Binary options investors consider the private sector credit to be an important fundamental indicator of the Australian economy as borrowing and spending are highly correlated. Consumers and businesses only take out credit when they feel confident about their ability to pay it back in the future. Hence, it also acts as a measure of consumer and business confidence.

In November, the private sector credit in Australia increased by 0.7% and the forecast for December is currently set at a slightly lower rate of increase, at 0.6%.

Trade Recommendation for the AUD/JPY


Since penetrating below the important support level around 88.00, the AUD/JPY has remained mostly range bound. Last week, the AUD/JPY penetrated below the support around 86.50, but a lack of bearish momentum in the market pushed the price higher within a day.

The December 18 bar formed an inside bar (IB), and currently the AUD/JPY price is trading within the high and lows of this bar.

As the Australian private sector credit is expected to come slightly below last month’s rate of increase, there might be some bearish momentum in the market by Thursday. However, given that most Australian banks would be closed for the holidays, we are not expecting a lot of volatility.

Under the circumstances, it would be recommended that traders consider placing a PUT order for the AUD/JPY with their binary options brokers once the price closes below the 86.50 level, as it would likely push the price towards the secondary uptrend line.

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About our Forex and Binary Options Analyst:  Asif Imtiaz

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