FxWirePro: AUD/JPY retraces dip below 85 handle, intraday bias neutral

• AUD/JPY slammed below 85 handle, hots session lows of 85.89 on escalating N.Korean tensions.
   
• AUD bulls unimpressed yesterday after the RBA refused to join the hawks and retained its neutral stance.
   
• Negative surprise from China Caixin PMI another blow to the Australian dollar.
   
• The pace of expansion in China's service sector cooled to 51.6 in June from 52.8 in May, missing expectations of a slight uptick to 52.9. 
   
• At 51.1 in June, the Composite Output Index fell from 51.5 in May to signal the slowest rate of expansion in a year.
   
• Momentum indicators for the pair are at overbought levels and on the verge of a rollover.
   
• The pair is trading in a narrow range below 5-DMA and intraday bias remains neutral.
   

Support levels - 85.62 (61.8% Fib), 85, 84.62 (20-DMA), 84.41 (100-DMA)

Resistance levels - 86.32 (5-DMA), 86.74 (78.6% Fib), 87

Call update: Our previous call (http://www.econotimes.com/FxWirePro-AUD-JPY-breaks-major-trendline-resistance-at-85-good-to-go-long-on-dips-778811) has hit all targets.

Recommendation: We prefer to wait for clear directional bias.

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