FxWirePro: AUD/JPY erases early losses, stiff resistance at 76.88 could cap further gains

AUD/JPY chart - Trading View 

AUD/JPY has erased early losses and edged higher from session lows at 76.49. The pair was trading 0.13% higher at 76.77 at around 07:00 GMT. 

The Aussie dollar remains unperturbed by the Australian-Sino tensions. Upbeat China Industrial Profits data cushions downside. 

Data released earlier today showed China’s October month Industrial Profits grew 28.2% YoY versus 10.1% prior. The year-to-date figures were up 0.7% YoY, the first positive figure in 2020.

China’s decision to impose preliminary tariffs on Australian wine could escalate diplomatic tensions between the two countries, dragging on the AUD.

Technical indicators support upside in the pair. But stiff resistance at 76.88 (falling trendline) could cap upside. Decisive break above 76.88 finds next major hurdle at 200W MA at 79.31. 

On the flipside, the pair finds major support at daily cloud at 76.21. Breach below cloud will negate any bullish bias. Retrace till 23.6% Fib at 74.07 then likely.