- AUD/JPY has been struggling to break above stiff resistance at 21-EMA since the past few sessions.
- The pair is trading largely range bound on the day, with the day's high at 81.66 and lows at 81.32.
- Markets remain risk averse, keeping demand for JPY and hence downside pressure on the pair.
- The United States is due to impose the tariffs on Chinese exports.on July 6.
- China on the otherside has reiterated that the its retaliatory tariffs on US goods will take effect immediately after US tariffs on Chinese imports kick in.
- The Aussie has been struggling to develop bullish momentum against the Yen for several weeks.
- We see scope for test of major trendline support at 80.60. Break below will accentuate weakness. Next major bear target lies at 61.8% Fib at 79.26.
- On the flipside, breakout at 21-EMA could see upside till 110-EMA at 83.14. Breakout there could see continuation of upside.
Support levels - 81.37 (50% Fib), 80.60 (major trendline), 80, 79.26 (61.8% Fib)
Resistance levels - 81.58 (5-DMA), 81.87 (21-EMA), 82.40 (55-EMA), 83.14 (110-EMA)
Recommendation: Good to go short on break below 50% Fib (81.37), SL: 81.90, TP: 81/ 80.60/ 80.50.
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -14.0797 (Neutral), while Hourly JPY Spot Index was at 26.5491 (Neutral) at 0345 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
