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FxWirePro: AUD/JPY fails to hold gains above weekly 200-SMA, good to go short on rallies

  • AUD/JPY has failed to hold break above weekly 200-SMA, intraday bias has turned bearish.
  • The pair has formed a gravestone Doji at highs on the weekly charts. Stochs are at overbought levels and RSI flatlined.
  • Price action hovering around 1H 200-SMA at 88.07 after breaking strong trendline support at 88.30 levels.
  • JPY weakness seen on general risk-off, weak Japan manufacturing growth data and BoJ announcement regarding reduction in JGB purchases.
  • Break above 1H 200-SMA could see upside till 88.56 (4H 20-SMA). Bearish invalidation only on decisive break above weekly 200-SMA.

Support levels - 87.38 (weekly 5-SMA), 87.09 (20-DMA), 86.64 (July 12 low)

Resistance levels - 88.66 (weekly 200-SMA), 89, 89.32 (July 20 high), 90

Recommendation: Good to go short around 88.20/30, SL: 89, TP: 87.65/ 87.10/ 86.65

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