FxWirePro: AUD/JPY rejected at session highs, slips back into daily cloud, bias neutral

• AUD/JPY was rejected at session highs at 87.57, the pair slips back into daily cloud.
   
• Upside has been struggling at cloud top from multiple sessions, further upside only on break above.
   
• Technical studies are neutral, RSI flat but above 50 levels, Stochs are showing a turn from near overbought levels.
   
• Breakout above daily cloud could see test of rising trendline resistance at 89.80.
   
• The antipodean largely ignores upbeat China PMI data released earlier today.
   
• China's August Caixin PMI unexpectedly rose to 51.6, strongest since Feb. The outcome was above forecasts at 50.9.
   
• 5-DMA is immediate support at 87.18, we see drag till 86.76 (20-DMA) on break below.

Support levels - 87.18 (5-DMA), 86.76 (20-DMA), 86.44 (23.6% Fib retrace of 76.78 to 89.42 rally)

Resistance levels - 87.51 (cloud top), 88.15 (Feb 15th high), 88.70 (Aug 1 high), 89.80 (trendline)

Call update: We had advised a long in our previous call (http://www.econotimes.com/FxWirePro-AUD-JPY-breaks-above-20-DMA-on-track-to-test-trendline-resistance-at-8970-stay-long-874160).

Recommendation: Bias higher. Hold for targets.

FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -67.8556 (Neutral), while Hourly JPY Spot Index was at 31.3529 (Neutral) at 0915 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.

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