- AUD/JPY is extending choppy trade around 55-EMA, overall bias remains bearish.
- The pair is struggling to hold gains above 20-DMA and we see upside only on decisive break above.
- Technical indicators on daily charts have turned bearish. Stochs have rolled over from overbought levels.
- RSI has fallen below 50 level and biased lower. MACD is on verge of bearish crossover on signal line.
- Poor Australia inflation data keeps pressure on the Aussie. CPI rose to 2.1% y/y in Q2 from 1.9% in Q1 but fell short of the market expectation of 2.2%. On a quarterly basis, the CPI met Q1's reading with 0.4%.
- We see scope for test of channel base 80.75. Bearish invalidation only above 110-EMA at 83.06
Support levels - 81.80 (July 24 low), 81, 80.75 (channel base)
Resistance levels - 82.51 (nearly converged 20 & 50-DMA), 83.06 (110-EMA)
Call update: Our previous call (https://www.econotimes.com/FxWirePro-Aussie-slides-on-massive-yuan-devaluation-good-to-short-AUD-JPY-on-break-below-20-DMA-1405992) is progressing.
Recommendation: Hold for targets.
FxWirePro Currency Strength Index: FxWirePro's Hourly AUD Spot Index was at -68.5329 (Neutral), while Hourly JPY Spot Index was at 158.915 (Bullish) at 0645 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
