AUD/JPY Appears Bearish amid Declining Existing Home Sales in the US

Australia – House Price Index

Today, at GMT 12:30 a.m., the Australian Bureau of Statistics released the House Price Index (HPI), which measures the changes in the selling price of houses in the 8 state capitals in Australia.

Since rising house prices indicate that investors are confident about purchasing houses and vice-versa, it can Australian binary options brokers consider the HPI to be a leading indicator of investor confidence in the country. The HPI is usually released every three months in a quarter-over-quarter format.

Last month, the Australian HPI suggested that house prices in Australia’s 8 state capitals have increased by 4.7% and the forecast for this month was set at an additional increase of 2.0%. However, the actual figure came out much lower than what the market was expecting, at 0.2% increase.

Japan – Tokyo Core CPI

On Thursday, at GMT 11:30 p.m., the Japanese Statistics Bureau will release the year over year Tokyo Core CPI figure, which measures the changes in the price of goods and services bought by consumers in Tokyo over the last month. However, this figure usually excludes the fresh produce as the volatility of fresh food price tends to distort the core numbers.

Since the consumer price makes up a large portion of the overall inflation in Japan and food prices have a major contribution to the CPI basket of goods, the food price of the capital Tokyo usually represents a great sample data for economists to predict the future inflation in the country. Hence, binary options investors pay special attention to the Tokyo Core CPI data.

In February, the Tokyo Core CPI figure declined by 0.1% and the forecast for March is currently set at an additional (y/y) decline of 0.2%.

Trade Recommendation for the AUD/JPY


Since forming a bullish pin bar on February 11, the AUD/JPY price has remained in a bullish trend, which pushed the price above the downtrend line on March 2. After breaking above the downtrend line, the AUD/JPY price further climbed 350 pips and reached near the historical pivot zone around 86.15, where it found strong resistance.

Although the AUD/JPY penetrated above the 86.15 level for a while, soon the bears pushed the price below the resistance zone and it formed a bearish outside bar (BEOB), which pushed the price towards the minor support around 84.00.

As the US existing home sales declined, the market fundamentals also support a bearish move with the AUD/JPY price this week.

Under the circumstances, it would be recommended that binary options traders consider placing a PUT order for the AUD/JPY with their binary options brokers once the price closes below the 84.00 level.

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