FXStreet (Mumbai) – The bearish grip on the AUD loosened a bit as we progress towards the American session, offering some respite to the AUD/JPY cross.
AUD/JPY faces double whammy
Currently, the AUD/JPY pair drops -0.60% to 88.50, recovering slightly from fresh session lows struck at 88.38. AUD/JPY remains heavy, although attempts a minor-recovery beyond the mid-point of 88 handle, with the bulls offered support near 10-DMA located at 88.41.
The sell-off in the Aussie accentuated in the European trading hours, with the traders taking the excuse of poor capex numbers to correct this week’s rally beyond 89 handle.
Private capex spending slumped 9.2% in Q3, missing the forecast 2.8% decline big time. While the 2015-16 capex estimate, came in line with forecasts at $120 billion for the fourth estimate.
Further adding to the downside, the Japanese yen trades firmer versus the US dollar ahead of the Japanese inflation data due tomorrow. While the upcoming US session isn’t expected to provide any drivers as the US markets are closed on a trading holiday.
AUD/JPY Technical Levels
To the upside, the next resistance is located at 88.76 (1h 20-SMA) and above which it could extend gains to 89.08/17 (daily high/ Nov 25 high). To the downside immediate support might be located 88.41 (10-DMA) below that at 88.23 (1h 200-SMA).
(Market News Provided by FXstreet)