[MARKET ANALYSIS] Choppy trade in the JPY whilst AUD awaits tomorrow’s RBA

The JPY is experiencing notable volatility, which is contributing to choppy trade conditions in the broader DXY index, currently tethered by energy price movements.

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[MARKET ANALYSIS] Choppy trade in the JPY whilst AUD awaits tomorrow’s RBA

[MARKET ANALYSIS] APAC mostly firmer; Japan and Mainland China away on holiday

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  • DXY trades choppy, currently flat in a 98.04-98.22 range, with the index largely moving to energy price action, although overnight volatility in the JPY (see below) briefly swayed the DXY.
  • EUR/USD trades in a 1.1720-1.1758 range and is largely moving with the Buck amid a lack of major newsflow for the region, with the pair still within Friday’s 1.1714-1.1785 range and with the 100 DMA seen at 1.1708.
  • GBP/USD holds a mild upward bias above the 1.3550 mark on Bank Holiday and following a weekend of domestic politics ahead of the UK local elections on 7th May, viewed as a verdict on UK PM Starmer’s premiership.
  • USD/JPY is volatile, perhaps unsurprisingly to an extent, given last week’s suspected intervention. Newsflow has been light with Japanese participants also away for Golden Week holidays. The pair saw a sudden dip of around 38 pips at 2:17 BST, which was swiftly pared.
  • Antipodeans are modestly firmer against the USD as risk in Asia tilts higher. NZD narrowly outperforms, and the AUD/NZD cross approaches 1.2200 to the downside once again, with AUD traders looking ahead to the RBA announcement on 5th May. 
Context

Traders should watch the anticipated RBA announcement tomorrow, as it may sway the AUD, especially given the current mildly bullish action in both AUD and NZD against the USD. The mixed signals in currency pairs are a reminder of the market's sensitivity to central bank news and geopolitical developments.

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