FxWirePro: AUD/JPY hovers around 20-DMA at 86.74, good to go short on break below

• AUD/JPY extends downside after break below 50-DMA at 87.23, bias bearish.
   
• The pair is continuing in a possible 'Bullish Bat' formation on daily charts.
   
• Markets disappointed as Q2 GDP was in line with forecasts. Expectations of an upbeat print were built-in following strong current account data released yesterday.
   
• Price action hovers around major support at 20-DMA at 86.74. Break below will see drag till 86.15 (rising trendline).
   
• On the flipside, 50-DMA at 87.23 caps upside. Break above finds next major resistance at 87.82 (converged cloud top and trendline).

Support levels - 86.74 (20-DMA), 86.39 (38.2% Fib retrace of 81.486 to 89.425 rally), 86 (Aug 18 low)

Resistance levels - 87.23 (converged 5&50-DMA), 87.55 (23.6% Fib), 87.94 (Sept 1 high)

Call update: We had advised a short (http://www.econotimes.com/FxWirePro-Possible-Bullish-Bat-on-AUD-JPY-good-to-short-break-below-8677-880507).

Recommendation: Bias lower. Short break below 20-DMA.

FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at 42.4724 (Neutral), while Hourly JPY Spot Index was at 46.3987 (Neutral) at 0615 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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