- Aussie buoyed on upbeat construction activity data, pushes AUD/JPY higher to hit 3-week highs at 87.80.
- The pair has shown decisive break above 20-DMA and is on track to test trendline resistance at 89.70.
- As risk-off fades, the Japanese Yen is losing demand, traders do not see a further escalation of tensions in the Korean Peninsula.
- Technical studies are bullish, RSI above 50, Stochs biased higher, MACD is showing a bullish crossover.
- Price action has broken above daily cloud and we see a bullish 5 & 20 DMA crossover.
- We see weakness only on break below 20-DMA at 86.81. Retrace upto 200-DMA at 85.30 then likely.
Support levels - 87.30 (cloud top), 87.01 (5-DMA), 86.81 (20-DMA)
Resistance levels - 88.15 (Feb 15th high), 88.70 (Aug 1 high), 89.70 (trendline)
Recommendation: Good to go long on dips around 87.20/40, SL: 86.80, TP: 88/ 88.15/ 88.70/ 89/ 89.70
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at 86.0939 (Slightly bullish), while Hourly JPY Spot Index was at -100.295 (Bearish) at 0620 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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