AUD/JPY fails to hold above 5-DMA

Bid tone around AUD strengthened in Asia after consumer confidence hit highest since 2013, but is still struggling to take AUD/JPY cross above 5-DMA level of 76.56 levels.

Sentiment tilting in favor of Yen

An article in Nikkei Asian Review today quotes major banks/analysts stating the market expects Yen rally to continue as repeated intervention talk from BOJ/Japanese government is being ready by markets as a sign of exhaustion.

This is evident from the drop in the Dollar-Yen is Asia to near 100.00 levels even though the Japanese government announced a supplementary budget on Monday. The drop in the USD/JPY ensured the AUD/JPY cross failed to hold above daily 5-MA.

AUD/JPY Technical Levels

A break above 76.66 (daily high) would open doors for 77.00 (50% of 81.58-72.44). If breached, the resulting short unwind could see the cross test fresh supply around 77.71 (50-DMA). On the lower side, a violation of daily low of 76.40 could yield a drop to 0.76 handle. Further losses could run into support of 75.59 (June 16 low).