FxWirePro: AUD/JPY consolidates break below 50-DMA, bias lower, stay short

• AUD/JPY is trading a narrow range, consolidates break below 50-DMA at 87.61.
   
• Weak China Caixin/Markit September services PMI which printed at a 21-month low of 50.6 is likely to keep Aussie under pressure.
   
• Japanese traders were off on a National Holiday, but renewed North Korea risks to keep JPY bid.
   
• Technical studies are highly bearish, RSI below 50. Stochs sharply lower, but at oversold levels, so some caution advised.
   
• Daily Ichi cloud is now strong support at 86.98, break below finds next major support at 200-DMA at 85.78.
   
• On the flipside, bearish invalidation only above 20-DMA at 88.50.

Support levels - 86.98 (cloud top), 86.55 (Sept 6 lows), 86, 85.78 (200-DMA)

Resistance levels - 87.61 (50-DMA), 87.99 (5-DMA), 88.50 (20-DMA)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-AUD-JPY-continues-downside-in-Bullish-Cypher-pattern-eyes-20-DMA-at-8796-good-to-short-rallies-914078) has hit TP 1/2/3.

Recommendation: Stay short for further downside. Target 87/ 86.55/ 86.

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