- Aussie slumps across the board dented by weak Australia trade balance and downbeat China Caixin services PMI.
- Australia's trade surplus narrowed more than expected in June, came-in at AUD 856 million vs. expected print of AUD 1800 million.
- Further, China July Caixin services PMI came-in at 51.5, missing forecasts of 51.9.
- Technical studies are bearish. RSI and stochs are biased lower. MACD is showing a bearish crossover on signal line.
- We had noted a 'Bearish Butterfly' formation on daily charts which raises scope for downside.
- The pair has shown a decisive break below 20-DMA at 88.01, intraday bias lower.
- Weekly 200-SMA at 88.64 weighs heavily on the upside. Further gains only on decisive break above.
Support levels - 87.55 (23.6% Fib retrace of 81.486 to 89.425 rally), 87, 86.64 (July 12 low)
Resistance levels - 88.01 (20-DMA), 88.10 (5-DMA), 88.64 (weekly 200-SMA), 89
Call update: Our previous call (http://www.econotimes.com/FxWirePro-Bearish-Butterfly-Pattern-on-AUD-JPY-good-to-go-short-on-break-below-8782-830953) is progressing well.
Recommendation: TP1 almost hit. Hold for further downside.
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at 68.1476 (Bearish), while Hourly JPY Spot Index was at 42.837 (Neutral) at 0340 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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