- AUD/JPY down over 0.6% on the day, Aussie weakness drags pair lower.
- Aussie slumps across the board after downbeat inflation data dented RBA tightening expectations.
- Australia Q3 CPI came-in at 0.6% q/q vs. 0.8% expected. The annualised figure dropped from 1.9% to 1.8%. The RBA trimmed mean CPI cooled to 0.4% q/q from 0.5%.
- Technical studies have turned bearish. Stochs have rolled over from overbought levels. RSI has turned lower and slipped below 50 levels.
- The pair is holding major support at 87.87 levels (converged 50-DMA, cloud top and trendline). Break below will accentuate weakness.
- Scope then for test of next major support at 100-DMA at 87.13. Violation at 100-DMA could see drag till 85.70 levels.
Support levels - 87.87 (converged trendline, cloud top & 50-DMA), 87.13 (100-DMA), 86.55 (Sept 6 low)
Resistance levels - 88.12 (20-DMA), 88.22 (23.6% Fib retrace of 81.48 to 90.30 rise), 89.07 (Oct 23 high)
Recommendation: Good to go short on close below 87.87, SL: 88.25, TP: 87.20/ 87/ 86.55
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -118.351 (Bearish), while Hourly JPY Spot Index was at -68.2747 (Neutral) at 1055 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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