- AUD/JPY extends downside for 2nd consecutive session, breaks below 20-DMA, bias lower.
- The Japanese yen buoyed on robust manufacturing PMI data. Japan Jan Nikkei manufacturing PMI flash increased to 54.4 vs previous 54.
- The pair was rejected at major trendline resistance which was tested several times in the past few days.
- We see bearish invalidation only on breakout at trendline resistance currently at 89 levels.
- Technical studies are turning bearish. RSI is biased lower and Stochs have rolled over from overbought levels.
- On the downside, we see scope for test of 100-DMA at 87.31. And violation there could see further downside.
Support levels - 87.65 (34 EMA), 87.31 (100-DMA), 86.71 (cloud top)
Resistance levels - 88.19 (20-DMA), 88.48 (5-DMA), 89 (trendline)
Recommendation: Good to go short on rallies around 88.05, SL: 88.50, TP: 87.65/ 87.30/ 87
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -68.1272 (Neutral), while Hourly JPY Spot Index was at 113.486 (Bullish) at 0300 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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