FxWirePro: AUD/JPY extends sideways at 21-EMA support, break below will accentuate weakness

AUD/JPY chart - Trading View 

AUD/JPY was trading 0.31% lower on the day at 80.73 at around 10:45 GMT, bias turning bearish.

The pair is extending sideways at 21-EMA support from the past few sessions and break below will accentuate weakness.

Reserve Bank of Australia (RBA) Governor Philip Lowe in a speech earlier on Tuesday said coronavirus lockdowns would cause a sharp contraction in the economy this quarter.

Lowe also reiterated that interest rates were not expected to rise from record lows until 2024 given the persistently sluggish growth of wages.

That said, the central banker expressed confidence that activity would rebound quickly once restrictions were eased in the December quarter.

Aussie unimpressed on Lowe's cautious optimism. Market risk sentiment likely to remain the main driver for price action. 

Earlier today, data from Japan showed Industrial Production expanded at an annualized 11.6% in July and the Capacity Utilization contracted 3.4% from the previous month.

Technical bias for the pair remains bearish. 5-DMA is biased lower, Oscillators are biased lower and MACD is on verge of bearish crossover on signal line.

Break below 21-EMA will see dip till 20-DMA at 80.33 ahead of 23.6% Fib at 79.76. Bearish invalidation only above 200-DMA.