FxWirePro: AUD/JPY recovery capped at 100-DMA, bias lower, 200-DMA at 86.50 next bear target

• AUD/JPY recovery remains capped at 100-DMA at 87.30, we see upside only on retrace above.
   
• The pair closed below 100-DMA in last week's trade and we see bias for further weakness.
   
• Technical studies are bearish. RSI and Stochs are biased lower. We also see -ve DMI dominance and ADX is rising to support trend.
   
• The pair is now on track to test 200-DMA at 86.50. Cloud at 86.70 is strong support en-route.
   
• Violation at daily cloud will see weakness till 200-DMA. Breach at 200-DMA to see test of triangle base support at 85.50.
   
• We see bearish invalidation only on breakout at trendline resistance currently at 88.90 levels.

Support levels - 86.71 (Cloud & 50% Fib), 86.50 (200-DMA), 86.16 (61.8% Fib retrace of 84.349 to 89.089 rally)

Resistance levels - 87.31 (100-DMA), 87.60 (5-DMA), 88.01 (20-DMA), 88.90 (trendline)

Call update: Our previous call (https://www.econotimes.com/FxWirePro-AUD-JPY-breaks-20-DMA-support-at-8820-on-track-to-test-100-DMA-at-8731-stay-short-1112233) has hit all targets.

Recommendation: Book partial profits at lows. Trail stop loss to 87.65, watch for further weakness, target 86.75/ 86.50/ 86.20.

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