- AUD/JPY bounces off 8-week lows at 86.69 with a Doji formation.
- Aussie better bid after upbeat Australia trade & housing data released earlier today.
- Australia's trade balance widened to AUD 1,745 million in September vs. AUD 1200 million expected. Exports rose 3% m/m, while imports growth stalled.
- Meanwhile, building approvals for September rose 1.5% m/m vs -1.0% expected and 0.4% last.
- Technical indicators have turned bullish in the pair. Stochs have rolled over from oversold levels.
- RSI and Stochs are biased higher and MACD is on verge of bullish crossover on signal line.
- The pair has retraced break below 100-DMA and is currently testing 50-DMA at 87.96.
- We see scope for further upside in the pair. Next likely target for bulls lies at 88.70 (trendline resistance).
- On the flipside, break below 100-DMA could see resumption of further downside.
Support levels - 87.35 (nearly converged 5 and 100 DMAs), 87, 86.83 (38.2% Fib retrace of 81.48 to 90.30 rise)
Resistance levels - 87.96 (50-DMA), 88.22 (23.6% Fib), 88.70 (trendline)
Recommendation: Good to go long on dips around 87.70/80, SL: 87.30, TP: 88.20/ 88.70
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at 154.8 (Bullish), while Hourly JPY Spot Index was at -96.4534 (Bearish) at 0430 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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