FxWirePro: AUD/JPY erases early gains, struggles for direction at 55-EMA support

Chart - Courtesy Trading View 

AUD/JPY slips lower from session highs at 91.99 and was trading at 91.66, down 0.05% on the day at 06:20 GMT.

Data released by the Australian Bureau of Statistics earlier on Tuesday showed Australian retail sales rebounded in January after a surprise plunge in the previous month.

Australia Retail Sales rose to 1.9% in January, higher than the consensus of 1.5%, after contracting by 3.9% in December.

Upbeat retail demand data is going to add to the current troubles for the Reserve Bank of Australia (RBA) policymakers who are trying to soften inflationary pressures.

Australian gross domestic product (GDP) and monthly consumer price index (CPI) data are due on Wednesday, which will drive further price action. 

Australia's economy is expected to grow by a solid 0.7% in Q4 2022 and at 2.7% on an annualized basis. Inflation is expected to soften slightly to 7.9% in January, from 8.4% the previous month. 

On Japan data front, annual Retail Trade (Jan) rose to 6.3% vs. consensus of 4.0% and the prior release of 3.8%. However, the Japanese Yen unimpressed.

Further, Japan Industrial Production (IP) for January shrunk 4.6% versus -2.6% expected and 0.3% prior growth.

Technical Outlook

- Recovery attempts in the pair have been capped at 200-DMA

- Price action is extending gradual grind lower along 5-DMA

- MACD confirms bearish crossover on signal line

- GMMA indicator shows major and minor trend are neutral

- The pair is grinding sideways along 55-EMA support

Support levels:

S1: 91.59 (55-EMA)

S2: 90.68 (55-week EMA)

Resistance levels:

R1: 91.92 (110-EMA)

R2: 92.11 (200H MA)

Summary: AUD/JPY struggles for direction at 55-EMA support. Break below will find next major support at daily cloud. Bullish continuation only above 200-DMA.