FxWirePro: AUD/JPY hovers around 55-week EMA support, set to resume downside on break below

AUD/JPY chart - Trading View 

Spot Analysis:

AUD/JPY was trading 0.12% higher on the day at 81.02 at around 08:35 GMT

Previous Week's High/ Low: 81.65/ 79.83

Previous Session's High/ Low:  81.35/ 80.75

Fundamental Overview:

Australia’s Q2 Producer Price Index (PPI) rose past 0.2% forecast and 0.4% prior to 0.7% QoQ whereas the Private Sector Credit for June also crossed 0.1% expectations and 0.4% previous readouts to 0.9% MoM.

Resurging covid numbers weigh on the market sentiment and put a bid under the safe-haven assets like the yen.

Japan witnesses above 10,000 cases for the first time and stays ready to take more prefectures under virus-led emergency.

Technical Analysis:

- AUD/JPY has ignored last week's Dragonfly Doji formation and is extending weakness

- Price action has slipped below 200-DMA, momentum studies are bearish

- GMMA indicator shows major and minor trend are bearish

- Volatility is high and rising, Chikou span is biased lower

Major Support and Resistance Levels:

Support - 80.38 (55-week EMA), Resistance - 81.34 (200-DMA)

Summary: AUD/JPY was trading below 200-DMA resistance. The pair shows bearish bias. Break below 55-week EMA will plummet prices.