AUD/JPY: teasing contracting triangle breakout on above-forecast Australia CPI

• A better-than-expected Australia consumer price index (CPI) is pushing the AUD higher across the board.
• AUD/JPY looks set to confirm a contracting triangle breakout on the hourly chart.

The bid tone around the Aussie dollar strengthened, pushing the AUD/JPY pair to a session high of 78.56 after Australia's fourth-quarter inflation numbers bettered estimates.

The consumer price index rose 0.5 percent quarter-on-quarter, beating the expected print of 0.4  percent. The CPI had risen by 0.4 percent in the third quarter. The annualized CPI of 1.8 percent also beat estimates but came in slightly lower than the previous quarter's figure of 1.9 percent.

Meanwhile, the Reserve Bank of Australia's (RBA's) trimmed mean CPI matched estimate of 0.4 percent quarter-on-quarter and 1.8 percent year-on-year.

The above-forecast CPI headline unlikely to trigger an RBA reaction, but is nevertheless boding well for the Aussie dollar at press time.

The AUD/JPY pair, in particular, could revisit recent highs above 78.00, as the pair is currently trading well above the upper edge of the contracting triangle of 78.34. Put simply, a bull breakout looks like a done deal.

AUD/JPY Technical Levels